The Scottish Government has unveiled more than £160 million of new funding to targeted in 2016/17 on home ownership schemes to support 5000 households to buy their own home.

More than £80m will go to the established Open Market Shared Equity Scheme (OMSE) helping up to 2,000 eligible first-time buyers on low to moderate incomes.

The Help to Buy (Scotland): Affordable Home Ownership scheme will help up to 3,000 households next year, backed by £80m equity support towards the purchase price.

The three year £195m Help to Buy scheme, which will help thousands of lower income households buy a new-build home, will open for applications on March 1.

The country’s home building industry emphasised the importance of such support in sustaining jobs and providing Scots with the opportunity to realise their home ownership aspirations.

Incoming chief executive of trade body Homes for Scotland, Nicola Barclay, said: “Since its introduction, the Help to Buy initiative has proved enormously successful. With demand consistently outstripping the available budget, it has clearly demonstrated the desire of Scots to own their own home whilst helping to get the industry moving again. This is evident in the results of our own research which shows the scheme has delivered in both social and economic terms - stimulating investment, increasing the number of homes built across the private and public sectors and creating jobs.

“Whilst £195m of funding has been announced for the next three years, the fact is that this represents a significant reduction on previous rounds. The changes in criteria with reducing price ceilings means that some builders will be excluded from the programme altogether which may restrict supply in some parts of the country. Others will have to adjust their product mix to suit but this will only be feasible if local authority planning departments support and work with them to do so quickly and efficiently.

“Allocating more money to a scheme that has proved its value over a number of measures would have allowed its benefits to be maximised even further.

“Acknowledging that Help to Buy is one tool in the box, we will continue to press the Scottish Government for more support across the industry – from a streamlined planning system to attracting more people into our sector.”

Allan Callaghan, managing director of Cruden Homes West, added: “The Help to Buy scheme helped many Cruden Homes first-time buyers take their first step on to the property ladder and today, Cruden warmly welcomes its successor which will act as a catalyst to support a new generation of Scottish homeowners for years to come.

“It’s clear that the Scottish Government has listened to the construction sector and our customers and considered the significant role that the Help to Buy scheme played in supporting stability and leading to job creation and economic growth. The impact of introducing a successor to this scheme will be felt across the sector - from larger operators with significant developments to those on a smaller scale.”

Social justice secretary Alex Neil said: “I am delighted that we can help 5000 home buyers into affordable home ownership in the coming financial year, underpinned by £160m, which is £35m more than originally planned for this year.

“Importantly, this new funding is specifically targeted to support thousands of low income individuals and families across Scotland get on or up the housing ladder.

“Since 2007, OMSE has helped over 6,000 first time buyers who would not otherwise be able to afford to buy their first home to get a foot on the housing ladder; and this year we will help another 2000.

“Through Help to Buy, we have already helped 7,500 households buy a new build home and over the next three years our successor Help to Buy Scheme will help another 7,500 as well as boosting the home building industry, and support jobs across Scotland.

“Homes for Scotland and the Council of Mortgage Lenders expressed clear views about how Help to Buy should be improved. We have listened carefully to what they told us and worked with them to develop the scheme to support industry and buyers as much as possible.

“The funding is also good news in particular for the SME sector of the housing industry. Hundreds of small developers will benefit from people buying new affordable homes across urban and rural Scotland.”