Thousands of first time buyers across Scotland could soon receive help getting onto the property ladder as the Scottish Government prepares to open applications for its new First Homes Fund by the end of June.
The scheme will provide eligible first time buyers with a £10,000 contribution towards the deposit on their first home through a shared equity model aimed at tackling one of the biggest barriers facing younger buyers and working families.
Shirley-Anne Somerville confirmed details of the fund to the Scottish Parliament, describing the initiative as a direct response to the growing difficulty many people face trying to buy a home.
Under the scheme, the Scottish Government will contribute up to £10,000 towards properties valued at up to £300,000.
The fund will be available to first time buyers purchasing either a new build or an existing property with a mortgage.
Importantly, the definition of a first time buyer applies not only within Scotland but anywhere in the world, meaning applicants must not currently own or previously have owned property elsewhere.
The Government says it expects the first phase of the fund to support around 2,000 households within the first 100 days of the new administration with ambitions to help 50,000 buyers over the course of this parliamentary term.
The move comes at a time when rising house prices, rental costs and mortgage deposit requirements continue placing pressure on many people hoping to buy their first home, particularly younger buyers attempting to save while dealing with wider cost of living increases.
Somerville said the Government had listened to concerns being raised by people across Scotland struggling to take that first step into home ownership.
“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.”
Under the shared equity structure, homeowners will still own and hold title to the property while the Scottish Government retains an equity share linked to the value of its contribution.
There will be no monthly repayments or interest charged on the Government’s share, which would normally only be repaid when the property is sold.
The First Homes Fund also forms part of a wider housing programme backed by what the Scottish Government describes as a record £4.9 billion investment in affordable housing over the next four years.
Further details on the application process are expected to be announced in the coming weeks ahead of the scheme formally opening.
