Last year, the Scottish Government created the First Home Fund. This fund was introduced to help first-time buyers providing up to £25,000 towards the cost of buying a property. The scheme opened to all first-time buyers in Scotland and allowed first-time buyers to buy either new or existing properties.
However, as a result of its success, the First Home Fund closed for applications on 2nd October 2020. The good news is that it re-opens on 1st April 2021 when it will start accepting applications again.
You’ll need to have a deposit of about 5% of the purchase price of the property. There is no upper limit or cap on the property price as there is with some of the other help to buy schemes
You’ll need to take out a mortgage of at least 25% of the purchase price and the mortgage must be on a capital and interest repayment basis.
The First Home Fund is a shared equity scheme. That means both you and the Scottish Government will contribute to the purchase of the property.
Your contribution will be your deposit and your mortgage. The Scottish Government’s contribution will be the balance of the price.
There are no monthly payments or interest on the money provided by the First Home Fund. You will only have to pay the Scottish Government back when you sell.
If you wish, you can pay off the Scottish Government’s share in the property, however, the amount you have to repay is based on the percentage of the Scottish Government’s contribution to the purchase. That means if your share in the property through your deposit and interest is, say, 80% and the Scottish Government’s contribution is 20%, when you sell the property, you’ll receive 80% of the sale price and the Scottish Government will receive 20% of the sale price.
The First Home Fund is administered by Link Housing who you need to contact to make an application. You can find out more about the application process by clicking here.
If you need any further information or wish to discuss your sale or purchase, please get in touch.
If you’d like to know more about our residential conveyancing services, please click here.
