New boost for first-time buyers although critics say more help needed
The reintroduction of the First Home Fund from the end of June will provide a welcome boost for the Scottish housing market, which has already been highlighted as an investment hotspot thanks to low but rising prices, according to experts.
The relaunched First Home Fund will provide a maximum interest-free deposit of £10,000 to first-time buyers purchasing a property valued at up to £300,000. As part of the scheme, the Scottish government will take an equity stake in the property and when the property is sold will receive a share of the profits proportionate to the original equity investment.
Applications open by the end of June, with the government supporting 50,000 buyers over the next five years.
Opening up other opportunities
Ben Finnie, property sales director estate agency at Gilson Gray, said the reintroduction of the fund would help thousands of first-time buyers who have been struggling to save for a deposit and would therefore unlock other opportunities for other investors as chains move more freely.
He said: “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.”
More help needed
However, Paul Hilton, CEO of Scottish property portal ESPC, said that more help was needed. “I am delighted to see that the First Home Fund is being brought back. We know that the demand for this fund is incredibly high – in fact, its last outing in 2021 had such exceptional demand that the scheme used up a year’s worth of funding in only eight days and had to close applications. Its successor, the OMSE scheme, reached its capacity within a month of opening.
“However, my excitement at the restoration of this scheme is tinged with concern that the help offered is now worth significantly less than it was in 2021; back then, the scheme offered buyers help of up to £25,000, which has now been reduced to a maximum of £10,000.”