Introducing the Scottish Government’s
‘First Home Fund’
A pilot scheme which will help first-time buyers with the cost of a new home has been launched in Scotland.
The Scottish government’s First Home Fund will contribute up to £25,000 towards the cost of buying a property through a shared equity scheme. A total of £150m will be made available between now and March 2021, providing assistance to at least 6,000 people. It will operate alongside the existing government schemes to help with the cost of buying a home.
So How Does It Work?
First-time buyers will be able to apply for up to £25,000 to help them buy a property. The pilot scheme will be open to all first-time buyers in Scotland, and can be used to help buy both new-build and existing properties.
ThThey will need a minimum deposit of about 5% and the mortgage must be at least 25% of the purchase price. It is a shared equity scheme, which means the purchase cost is split between the buyer and the Scottish government. The buyer usually repays the government’s contribution when the property is sold.
For example, if the buyer pays 85% of the property’s value through a deposit and a mortgage, the Scottish government will hold a 15% share. When the home is sold, the owner would keep 85% of the final sale price and the government would receive 15%.
However, the buyer can also increase their share of equity and repay all or part of the government’s stake in the property over time – a process known as “tranching up”.
Here’s A Theoretical Working Example With City Garden Apartments
With the help of the new First Home Fund you could live in City Garden Apartments, the stunning new eco-friendly residential development which is coming soon to the centre of Glasgow, for as little as £753 per month*
