ESPC welcomes first home fund revival following industry lobbying
Key Takeaways
- The relaunch of the First Home Fund is seen as a positive step for supporting first-time buyers in Scotland, following strong demand for previous schemes.
- The updated scheme will offer up to £10,000 towards deposits for first-time buyers purchasing properties valued up to £300,000.
- ESPC believes the reduced maximum support amount — down from £25,000 in 2021 — may limit the impact for buyers facing rising property prices, particularly in expensive areas like Edinburgh and East Lothian.
- Previous versions of the scheme proved hugely popular, with funding exhausted within days or weeks due to exceptionally high demand from buyers needing financial assistance.
- While the updated fund aims to help more buyers overall across the next five years, concerns remain that individual buyers may still struggle to bridge affordability gaps in today’s housing market.
ESPC CEO Paul Hilton has said he is “delighted” by the SNP’s announcement that the First Home Fund will be relaunched next month, but that the scheme’s reduction in value may mean that first-time buyers aren’t getting as much help as they might need to step onto the housing ladder.
ESPC lobbied for the return and expansion of this scheme prior to the elections earlier this month, citing a real and proven need for financial support for first-time buyers, especially those looking to buy property in more expensive locations, such as in Edinburgh and East Lothian.
The relaunched First Home Fund will provide a maximum deposit of £10,000 for first-time buyers purchasing a property up to the value of £300,000, with the scheme aiming to help 50,000 buyers over the next five years.
Further commenting on the announcement, Paul said: “I am delighted to see that the First Home Fund is being brought back, and so soon into the new administration. 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. It’s evident that first-time buyers are in need of financial assistance more than ever, particularly in areas where the property prices are higher than average.
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. Overall, the funds will stretch further to help greater numbers of buyers, and the threshold for property values has been increased, but obviously the impact of the support will be limited for individual buyers, as property prices have continued to rise over the last five years.
Any assistance is better than none at all, of course, but it is worth discussing that despite the great hurrah surrounding the return of this scheme, the First Home Fund is now materially less valuable to its beneficiaries than it was five years ago.”