It’s no secret that getting on the property ladder while being a first-time buyer is no easy feat, especially for younger people. Now, the Scottish Government has introduced a new initiative, the First Homes Fund, giving Scots the chance to get on said property ladder, with an interest-free loan of up to £10,000, starting in June.
However, it’s not just that the Government is giving people free money in the tens of thousands of pounds. Of course, there is more to it!
How will the First Homes Fund loans for first-time buyers work?
Available for properties of the value up to £300,000, the First Homes Fund will offer an interest-free loan of up to £10,000 for those accepted. What is more, the Scottish Government will then have an equity share of the property, proportionate to the amount of money loaned. However, the homeowner will still have the title to the property in their name.
Until the property is sold, there will be no need to make any monthly payments. This would mean that once the property is sold, the Government will receive the profits equal to its share of the ownership.
The first phase of the initiative is set to offer 2,000 applicants loans in the first 100 days, and 50,000 total in the duration of the Parliament.
Who can qualify?
Who qualifies to apply is fairly straightforward here – you have to be a first-time buyer buying with a mortgage, and the property price must not exceed £300,000. The fund can be used for both new builds and existing properties.
How do I apply for the First Home Fund loan?
The full details on how to apply have not yet been released, so watch this space! The applications will open at the end of June 2026.
Why has the First Home Fund been introduced?
Social justice and housing secretary Shirley-Anne Somerville said: “This is a direct response to the experience of people across Scotland. We have listened, and we are taking fast and decisive action.”
“We know that the single biggest hurdle facing first-time buyers is often not their ability to repay the mortgage, it is the difficulty in saving for the initial deposit, the upfront cost that prevents them even entering the market.”
“We also know that too many people cannot rely on financial support from family to bridge that gap, and nor should they be expected to. The result is a rent trap, a situation where households are locked into paying high rents, unable to save, and therefore unable to move forward.”
“This policy will support the young couple renting and saving, but never quite reaching their target. It will support the key worker priced out of the community they serve, and it will support the family looking for stability and a place to call their own.
“From our island communities to our towns and cities, from rural areas where supply is constrained to urban areas where rents are the highest. This fund will help first-time buyers in every part of Scotland to take that crucial first step. This First Homes Fund is for them.
“With this scheme, we are saying clearly that we understand the barriers you face, and we will act to take those barriers away.”
First Minister John Swinney said: “I want to make sure that the new Scottish Government takes all the actions we can take to support people with the challenges of the cost of living, and one of those examples which percolated throughout the whole of the election campaign was the challenges of people accessing the housing markets.
“I want to make sure the Scottish Government is on the side of first-time buyers aspiring to join the property ladder to make sure they’ve got the opportunity to take forward that step in life.”
