The Scottish Government has launched a shared-equity scheme offering interest-free loans of £10,000 to first-time buyers, aimed at addressing deposit barriers in the property market.
The First Homes Fund will be available for purchases of both new-build and older properties valued up to £300,000. The initial phase is expected to support 2,000 households from next month, with plans to assist 50,000 households over the course of the current parliamentary term.
Scheme structure
Under the programme, the government will hold an equity share in the property, though the homeowner will retain ownership and title. No monthly payments or interest charges will apply, with the government’s percentage equity share typically repaid upon sale of the property.
Shirley-Anne Somerville, Cabinet Secretary for Social Justice and Housing, told Parliament that home ownership has become increasingly difficult for younger people and first-time buyers. “People are saving what they can but finding that the cost of a deposit is simply too great a barrier,” she said.
Broader housing investment
The fund forms part of a wider housing programme backed by £4.9 billion in affordable housing investment over the next four years. The scheme represents a policy response to deposit affordability challenges affecting potential buyers across Scotland.
The initiative comes as landlords have been tightening tenant selection criteria in response to recent regulatory changes, potentially affecting rental market dynamics. Meanwhile, rental income has risen significantly across the UK property market.
The scheme’s impact on Scotland’s housing market will depend on uptake levels and whether the £10,000 contribution proves sufficient to bridge the deposit gap for buyers in higher-priced areas approaching the £300,000 threshold.
