Administrators are working to protect homebuyers stuck in “limbo” following the collapse of housebuilders Stewart Milne Group, a Scottish Government minister has said.

Wellbeing Economy Secretary Neil Gray met with administrators Teneo after the firm was appointed on Monday following the news that 217 roles were being made redundant.

Mr Gray said he stressed the importance that “every possible support” is offered to staff, contractors, suppliers and homebuyers impacted by the company, headquartered in Aberdeen, going bust.

His statement in Holyrood came after Tory MSP Douglas Lumsden raised the concern of staff and customers.

The north-east MSP said buyers who had paid deposits, were waiting on keys or required remedial work, were seeing their life savings put “at risk”.

Mr Gray said he raised the issue with Teneo at the meeting and said he understood the administrators were discussing options with the warranty provider the National House Building Council (NHBC).

“My understanding is that Teneo are in discussions with the NHBC and others around ensuring that the situation that he fairly raises around the very difficult situation that people will be finding themselves in – in some cases in limbo – can be resolved,” he said.

“That will be a challenge obviously depending on the circumstances.”

But he added: “Douglas Lumsden will understand that we’re coming at this within a 24-hour period, as are Teneo, so some of this is going to be information that is moving.”

Earlier, Jane Wood, chief executive of Homes for Scotland, which represents more than 200 members, expressed concern about more firms going bust.

Speaking on BBC Radio Scotland’s Good Morning Scotland programme, on Tuesday, she said: “We are very worried about it and we are worried the social and economic impact is not understood for housing. It’s a force for good, it affects all of our lives. It’s a human right, at the end of the day.”

She added: “Our ask would be that the Scottish Government needs to demonstrate that it does recognise the sector’s concerns and takes urgent action – that the provision of new homes for all tenures for everyone in Scotland who wants to live and work here is prioritised because it is urgent now.

“We can’t keep doing the same thing and expecting the houses that we need to be built, and our businesses, like Stewart Milne and other housebuilders, to remain sustainable.”

Teneo said that “no further construction” of Stewart Milne Group homes was being completed “at this time”, and said people who had reserved a home but not yet moved in would be contacted.

Former Aberdeen FC chairman Stewart Milne set up the eponymous business in 1975.

He said in a statement: “I am devastated by this totally unexpected outcome of the sale process and (am) struggling to accept it, given the profound impact it will have on employees, sub-contractors, suppliers and customers.

“Stewart Milne Group was up for sale and, following significant interest, two bids were submitted. The bank has not accepted either bid and withdrawn its funding.

“I tried everything I could to find a way to achieve a better outcome for the business and the people who depend on it.

“I believe one of the bids could have delivered a comparable, financial return to administration and, crucially, allowed the business to continue to operate, safeguarding hundreds of jobs and protecting livelihoods.”

A Scottish Government spokesperson said: “We understand that this will be incredibly concerning for those impacted.

Ministers have already spoken with administrators and made clear to them that all possible support should be offered to affected staff, suppliers and home buyers.

“The Partnership Action for Continued Employment team stands ready to provide full support to those affected by redundancy.

“The combined challenges caused by Brexit and economic mismanagement by the UK Government have triggered various issues including the rising cost of construction supplies, workforce challenges and increased mortgage costs.

“Despite the challenges, the housing sector has done incredible work to deliver thousands of homes in recent years and we will continue working with partners to mitigate these impacts in 2024.”