"This has been a crucial decision on the part of the Scottish Government in the context of the present pandemic, and one that is warmly welcomed by the industry."
The scheme was introduced as a pilot in December 2019 to help buyers purchase their first home from either the new or secondhand market, providing up to £25,000 as an equity loan. Buyers must contribute a minimum deposit of 5% of the purchase price and take out a minimum 25% mortgage on the purchase price.
The First Home Fund was launched with an initial budget of £150 million. The Scottish Government invested a further £50 million in July in response to reduced availability of higher loan-to-value mortgages caused by the Covid-19 crisis.
The new scheme has been particularly popular since the housing market reopened in June, and is expected to support more than 8,000 households into home ownership by the end of the financial year. Homebuyers who are completing purchases this financial year have until 6pm on 2nd October to apply.
Due to end in March 2021, the Government intends to reopen for applications in the new year for home purchases completing in 2021/22.
Housing Minister, Kevin Stewart, said: “The pilot of our First Home Fund has been a huge success, helping thousands of people own their first home.
“The fund has been especially important since property sales resumed over the summer, and we invested a further £50 million in July to help ensure that first-time buyers could still access the market despite changes to mortgages caused by the coronavirus pandemic.
“While the scheme is almost fully subscribed for 2020-21, I am pleased to say that I will reopen the pilot for the next financial year, and look forward to announcing further details of this in due course.
“In the meantime, first-time buyers will still be able to access shared equity schemes including Help to Buy (Scotland) and LIFT (the Low-cost Initiative for First Time Buyers), and I would encourage them to consider these options.”
Chief executive of Homes for Scotland, Nicola Barclay, added: “This has been a crucial decision on the part of the Scottish Government in the context of the present pandemic, and one that is warmly welcomed by the industry. As well as recognising the continuing demand from Scots to own their own home, extending the First Home Fund will provide more confidence for consumers and more investment certainty for businesses, the benefits of which will ripple through the wider housing sector and economy.
“If purchasers are to benefit from financial stimulus measures such as the First Home Fund, then we must ensure that all areas of government policy are aligned and pulling in the same direction to facilitate the delivery of more homes.
“That can-do attitude is equally important in the planning system. So it is very frustrating that, on the same day we have such a positive announcement on the First Home Fund, we are also having to respond to a Scottish Government planning consultation that directly threatens the home building industry’s ability to resolve the shortfall in housing supply that has arisen during lockdown.
“The proposals in the “Scottish Planning Policy and Housing” consultation – which include deleting the presumption in favour of sustainable development – give Scotland’s planning authorities the wrong message when they should instead be encouraged to work with home builders to facilitate an increase in the supply of much-needed homes across all tenures.”
