First-time buyers offered up to £10,000 interest-free loans from next month

Applications will open for a new first-time buyers fund by the end of June to take “barriers away” from buying a home, the Scottish Government has said.

The First Homes Fund will provide successful applicants with a £10,000 contribution towards a deposit on their first home.

The shared-equity scheme will be open to all prospective owners looking to make their first step onto the property ladder, with a limit of £300,000 on the value of the property purchased.

Speaking in Holyrood on Wednesday, social justice and housing secretary Shirley-Anne Somerville said: “This is a direct response to the experience of people across Scotland. We have listened, and we are taking fast and decisive action.

“We know that the single biggest hurdle facing first-time buyers is often not their ability to repay the mortgage, it is the difficulty in saving for the initial deposit, the upfront cost that prevents them even entering the market.

“We also know that too many people cannot rely on financial support from family to bridge that gap, and nor should they be expected to.

“The result is a rent trap, a situation where households are locked into paying high rents, unable to save, and therefore unable to move forward.”

The first phase of the fund is expected to support 2,000 households over the first 100 days of the new Scottish Government and 50,000 over the course of the Parliament.

Somerville continued: “This policy will support the young couple renting and saving, but never quite reaching their target. It will support the key worker priced out of the community they serve, and it will support the family looking for stability and a place to call their own.

“From our island communities to our towns and cities, from rural areas where supply is constrained to urban areas where rents are the highest. This fund will help first-time buyers in every part of Scotland to take that crucial first step. This First Homes Fund is for them.

“With this scheme, we are saying clearly that we understand the barriers you face, and we will act to take those barriers away.”

Speaking to the Press Association earlier while visiting a housing development in East Lothian with Somerville, First Minister John Swinney said he was made aware of housing challenges throughout the election campaign.

He said: “I want to make sure that the new Scottish Government takes all the actions we can take to support people with the challenges of the cost of living, and one of those examples which percolated throughout the whole of the election campaign was the challenges of people accessing the housing markets.

“I want to make sure the Scottish Government is on the side of first-time buyers aspiring to join the property ladder to make sure they’ve got the opportunity to take forward that step in life.”