First Home Fund: Scottish government closes applications after five working days
Potentially thousands of first-time buyers will be left feeling devastated after the Scottish government announced applications for a £25,000 support scheme to buy a property have closed after five working days.
The First Home Fund, a shared equity pilot scheme to provide first-time buyers with funding, opened on 1 April this year with a budget of £60 million.
It was open to all first-time buyers in Scotland and could be used to help buy both new build and existing properties.
After just five working days, the funding, which was less than a third of last year’s budget of £200 million, has been used up and applications have now closed.
A message on the Scottish Government website reads: “The First Home Fund is fully committed for 2021-22 and applications are now closed.
"Any applications in progress but not yet submitted at point of closure are unable to be processed.”
Scots resident Carol Ann McCaffrey, who had put an offer in for a property this week, said: “What a kick in the teeth.
"I put an offer in for a house yesterday, it was accepted and you've removed the First Home Fund today, in less than a week after in was launched this financial year.
"What was the point in getting people’s hopes up.”
Another commenter reacted to the news on social media saying: “I can’t believe the first home fund has been fully used in a week. No chance of getting on the property ladder now.
"Is there any reason why it’s been reduced so drastically?”
Reacting to the news Nicola Barclay, chief executive of Homes for Scotland said the announcement will be “a huge blow” to many in Scotland who had their hopes up for buying a new home.
“This will clearly be very disappointing news to all those people who had been hoping that the First Home Fund would enable them to get onto the property ladder,” she said.
"We anticipated that there would be huge demand given the success of the pilot scheme run last year.
"Despite this, the Scottish government allocated just 30 per cent of the levels spent in 2020, citing budget cuts from Westminster for the reduction.”
She added: “I urgently call on Kate Forbes to act now to support all those who will be devastated by today’s announcement.
"No one can be in any doubt about the need to support those unable to save for large deposits, and we will be watching closely at pledges made by all political parties as the election campaign continues.”
The First Home Fund allows buyers to own 100 per cent of their new property but the Scottish Government will contribute a maximum of 49 per cent equity stake based on a property’s value or purchase price, whichever is lower, and up to a maximum of £25,000.
Buyers will make up the remainder of the property price through their deposit and mortgage from their financial provider.
Last year the Scottish government invested a further £50 million into the First Home Fund scheme on top of its initial £150 million budget for 2020/21 due to demand.