Scotland’s home building industry has welcomed Chancellor George Osborne’s introduction of a new Help to Buy ISA to assist those saving for their first property but warned it would be of little use north of the border unless there is help to build the homes that are needed in the first place.

Delivering the final budget before the general election yesterday, the Chancellor said the new Help to Buy ISA will provide government a bonus of £50 to first-time buyers in England for every £200 saved towards buying a new home.

With half a million homes required in Scotland over the next 20 years but current annual production levels pointing to a massive shortfall with less than 15,000 completed last year, Philip Hogg, chief executive of trade body Homes for Scotland, said while the help to buy ISA may help some first time buyers to overcome barriers to home ownership, it fails to address the fundamental problem of housing supply.

He said: “The Chancellor has again delivered welcome support for home buyers with this new Help to Buy ISA but unless urgent action is taken by the Scottish Government to address the housing crisis here it could be of little use.

“Whilst there have been big jumps in the number of new homes started in England as a result of radical measures on planning and the introduction and subsequent extension of the Help to Buy shared equity scheme, the picture in Scotland is very different.

“Although the Scottish Government’s Help to Buy shared equity scheme has been an unqualified success and a major boost to the construction of much needed new homes, we face its effective end in just a few months as funding has not reflected need and demand, leaving Scotland’s buyers and builders with an uncertain future.

“As Westminster parties set ambitious targets to increase building ahead of the general election, Scotland lags behind.

“The Scottish Government must get to grips with Scotland’s housing crisis now and take the bold action which is necessary to ensure we have enough homes in the right locations to house our growing population.”

RICS Scotland has called for the Scottish Government to use the additional funding of £31 million in 2015-16, received through Barnett consequentials, to support housing, particularly in the self-build market (which now accounts for 10 per cent of all new builds), the SME sectors and in the provision of infrastructure delivery.

Sarah Speirs, Director RICS Scotland, said: “The launch of a new savings account, with a 25 per cent (capped at £3,000) bonus of the amount saved, will help individuals with the cost of their first home. This could help around 105,000 first time buyers in the next 5 years in Scotland. However, this is assisting demand at a time when supply is the fundamental issue, and we would welcome more support to increase new house starts in the Scottish housing market.”

RICS also welcomed the City Deals for Aberdeen and Inverness, provided the investment benefits property, in addition to boosting infrastructure and transport connectivity to those regions.