Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

First Homes Fund Relaunches in Scotland to Support First-Time Buyers

The Scottish government has relaunched the First Homes Fund, providing new support for first-time buyers facing deposit barriers. The scheme reopened on 24 June as a shared equity initiative, offering eligible buyers a government contribution of up to £10,000 towards the purchase price of a property.

The First Homes Fund is available to first-time buyers purchasing a main residence in Scotland, with a maximum property value of £300,000. Under the scheme, the government takes an equity stake in the home, which is repaid when the property is sold. Buyers are required to provide a minimum personal deposit of 5% of the property's full purchase price.

For joint applications, only one applicant must be a first-time buyer. The scheme can be used for both new-build and existing homes. Mortgages must be on a repayment basis and selected from the affordable housing range, with applications made under the shared equity scheme category.

If the agreed purchase price is higher than the property's valuation, buyers must provide a 5% deposit based on the valuation and cover the difference between the valuation and the purchase price. Although the government provides an equity contribution, buyers will own 100% of the property. Mortgage lending and product selection will be based on the property's full purchase price.

The equity loan is interest-free for the entire term and does not require ongoing equity loan payments. The buyer's equity stake must be expressed as a whole-number percentage, and any rounding up or down cannot exceed the scheme's maximum contribution.

Letting agents and inventory clerks should note that the scheme is designed for owner-occupiers purchasing their main residence, and not for buy-to-let or investment purposes.