The return of Scotland’s First Home Fund has been heralded as ‘brilliant news’ for the country’s property market.
Relaunching its shared-equity scheme, the Scottish Government initiative will give first-time buyers a £10,000 contribution towards a deposit on their first home – with a limit of £300,000.
Open to all looking to make their first step on to the property ladder, the first phase is expected to support 2,000 households over the first 100 days of this government and 50,000 over the course of this parliament. The first round of applications for a First Homes Fund will open by the end of June.
Scottish Government cabinet secretary for social justice and housing, Shirley-Anne Somerville confirmed the scheme’s opening to the Scottish Parliament. She said, “For too many people across Scotland, particularly younger people and first-time buyers, home ownership has felt increasingly out of reach. In communities the length and breadth of our nation, we are hearing the same story; people saving what they can but finding that the cost of a deposit is simply too great a barrier.
“That is the context in which this Government will act. This is a direct response to the experience of people across Scotland. We have listened and are taking fast, decisive action.
“The Fund sits within a broader programme of action and supported by a record £4.9 billion investment in affordable housing over the next four years.
“We promised we would support first time buyers and we are delivering.”
Ben Finnie, property sales director, Estate Agency, at Gilson Gray, said, “The return of the First Home Fund is brilliant news for Scotland’s property market and, more importantly, for thousands of first-time buyers who have been struggling to save for a deposit while dealing with rising living costs. This kind of support can make a genuine difference by helping more people take that first step onto the property ladder. We know from previous versions of the scheme that demand was incredibly strong, which shows just how needed this support is.
“The reintroduction of the fund will give the market a real boost across Scotland. First-time buyers are the foundation of the housing market – when they are able to buy, it creates movement all the way up the chain, increasing confidence and activity for buyers and sellers alike. For sellers, this should also be seen as a very positive development. Increasing the number of financially supported first-time buyers in the market means a larger pool of motivated purchasers actively looking for homes. That added demand can help sellers secure interest more quickly, improve confidence in transactions progressing smoothly, and ultimately help more properties get sold.
Claire Bathgate, head of sales at Dandara Scotland, commented, “Anything that helps first-time buyers in Scotland is hugely positive news. Without them, the entire housing market slows down. Amid the ongoing cost-of-living pressures, many first-time buyers tell us it feels harder than ever to save for a deposit and owning a home can seem like an impossible dream.
“We hope the scheme is distributed fairly and in well-spaced tranches. With previous Scottish Government initiatives, much of the funding appeared to be allocated very quickly after launch. As a result, it often benefited buyers who were already close to purchasing homes and able to move fast, rather than bringing much-needed new buyers into the market.
“What we would really like to see is an exemption for first-time buyers from paying LBTT on all properties, as that would make a really significant difference.”
Craig Fairfoull, group director at Dundas Estates, said, “This is extremely positive news for first-time buyers in Scotland. It’s particularly encouraging that the scheme supports both new-build and existing properties, while allowing buyers to repay the interest-free loan only when the home is sold. The announcement couldn’t have come at a better time. Following this week’s news of rising fuel bills, many households are facing growing affordability pressures, so measures like this will provide much-needed support and reassurance for aspiring homeowners.
“Coupled with reports that some of the UK’s biggest lenders are cutting mortgage rates, the outlook for the Scottish property market is becoming much more encouraging.”
Jamie Thomson, commercial director of Lochay Homes Limited, added,“Supporting first-time buyers in Scotland is vitally important. The average first-time buyer in Scotland is now aged between 30 and 32, and many already have families. They are desperate to secure a stable future, move out of rental accommodation and into a home of their own.
“While this new scheme will undoubtedly help buyers, there are questions over whether it goes far enough. A previous Scottish Government scheme offered a more generous £25,000 equity loan and, with the average first-time buyer deposit in Scotland now exceeding £43,000, affordability will remain a major challenge for many aspiring homeowners.”
