Cash fund for first-time buyers runs out of money in week

A fund giving first-time buyers in Scotland up to £25,000 towards a home has run out money after only a week.

The First Home Fund’s £60m pot was exhausted by April 8, having opened applications on April 1.

The scheme was expected to help around 12,000 people get on the property ladder.

However, its budget was slashed by £140m last year, with the Scottish Government blaming the UK Government’s spending review in November.

Nicola Barclay, chief executive of industry body Homes for Scotland, said: “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.

“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% of the levels spent in 2020, citing budget cuts from Westminster for the reduction.”

The announcement follows the early closure of the Help to Buy scheme, which gave first-time buyers a loan of up to 15% when buying a new-build home.

It closed on February 5, having been expected to run until March 2022.

An update on the First Home Fund page read: “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.”

A Scottish Government spokesperson said: “As stated on the Scottish Government website, the First Home Fund has now closed to new applications as the allocated 2021-22 budget for the fund has been fully committed. We expect the scheme to help around 12,000 households purchase their first home.

“As previously said, the total Scottish Government Financial Transactions budget in 2021-22 was cut by almost two thirds as a result of the UK Government’s Spending Review in November.

“As such, difficult choices have had to be made including reduced funding for the First Home Fund in 2021-22 and the closure of the main Help to Buy scheme.”