The Help to Buy equity loan scheme, introduced in Scotland in September 2013, offers first-time buyers and other borrowers a loan for up to 20% of the value of the property they are buying, interest-free for the first five years.

It mirrors the scheme launched in April last year in England, but the maximum purchase price in Scotland is capped at £400,000 rather than £600,000 in England.

Official figures showed that 1,205 applications were received in Scotland by January and  203 households have so far successfully gained a mortgage and bought new homes using the initiative.

Deputy First Minister Nicola Sturgeon said:

“There is no doubt that getting onto, or moving up the property ladder, has become tougher in recent years which is why our Help to Buy (Scotland) scheme is crucial in helping more households take that step.

“Help to Buy is not only helping people buy their first home it also helps ‘second-steppers’ and others move to a new property and the popularity of the scheme is evident through the 1,200 plus applications that have been received so far.”

Chief executive of industry body Homes for Scotland Philip Hogg said:

“It builds upon the success of the MI New Home 95% mortgage guarantee scheme and represents another valuable tool offered by the new build sector to assist those looking to move onto and up the housing ladder. Indeed it has already demonstrated its ‘game changing’ impact since launch last September, acting as a positive indicator for industry recovery.”

But Hogg said there were still a number of barriers to recovery such as supply-side issues which need to be addressed if output was to increase to the levels required to meet housing need.

He added: “We therefore look forward to working alongside the Scottish government to address these issues and seeing the Help to Buy scheme grow further as it continues to stimulate the building of much needed new homes, supporting vital jobs, skills and apprenticeships as well as boosting the wider economy along the way.”