Scottish First Home Fund, A Guide for First Time Buyers
Introduction
The Scottish First Home Fund is expected to return as a helping hand for first time buyers struggling to save a deposit. While full details have not yet been confirmed, early indications suggest eligible buyers may be able to access up to £10,000 towards a home purchase through a shared equity arrangement.
Applications are expected to open by the end of June 2026, although criteria, lender participation and final scheme details may still change.
This guide explains how the previous scheme worked and what buyers may be able to expect.
What Is the First Home Fund?
The First Home Fund is a Scottish Government shared equity scheme designed to help first time buyers onto the property ladder sooner.
Under the previous scheme:
Buyers could receive up to £25,000 support (max is £10,000 this time)
The government took an equity share in the property
No monthly payments were required
The share was repaid when the property was sold
How the Equity Share Worked
The government contribution was converted into a percentage share of the property, rather than a fixed repayment amount.
Example:
Purchase price: £200,000
Government contribution: £10,000
Equity share: 5%
If the property later sold for £230,000:
The government would receive 5% of the sale price
Repayment = £11,500
If the property value decreased:
The government would still receive 5% of the sale price
So the amount repaid would reduce in line with the property value
How the Scheme Worked in Practice
Although details may change, the previous process usually looked like this:
Speak to a mortgage adviser to check affordability and lender options
Find a property and have an offer accepted
Apply through LINK Housing with financial and property documents
Undergo affordability checks
Receive an award letter confirming support
Submit full mortgage application
Complete legal work and purchase the property
On completion, the buyer owned the property, with the Scottish Government holding a percentage share.
Offers Over and Home Report Value
A key point in Scotland is that many homes sell above Home Report value.
Most lenders base lending on the valuation, not the higher offer price.
Example:
Home Report value: £240,000
Offer: £250,000
The mortgage is usually based on £240,000, meaning the extra £10,000 must come from the buyer.
The First Home Fund could help reduce the overall funding gap, but buyers often still needed savings for:
deposit
fees
any amount above valuation
Lenders and Mortgage Options
Previously, several lenders supported the scheme, including:
Barclays
Halifax
Nationwide Building Society
Leeds Building Society
TSB
Scottish Building Society
Bank of Scotland
Some lenders used specific shared equity products, and criteria varied. Important note: lender participation for the relaunched scheme has not yet been confirmed.
Deposit Requirements
The First Home Fund did not replace a deposit.
Most lenders still required at least:
5% buyer deposit
So the government contribution acted as a top up, not a substitute.
Things to Consider
Pros:
Helps reduce the upfront deposit needed
No monthly repayments to government
Can improve access to home ownership
Cons:
Government retains an ownership share
Selling or remortgaging can be more complex
Buyers may still need significant savings in competitive areas
Lender options may be limited
Final Thoughts
If the First Home Fund returns as expected, it could again become a useful option for Scottish first time buyers.
However, shared equity schemes are not suitable for everyone, and the long term implications should be considered carefully.
As the scheme has not yet launched, buyers should treat all details as indicative only until official guidance is published.
Speaking to a mortgage adviser early can help clarify whether this route is likely to suit your situation.