Scots loan scheme to help first time buyers to reopen next year

A pilot scheme that provides first-time buyers with loans of up to £25,000 to help them get on the property ladder is being continued next year, the housing minister said.

The Scottish Government still has to fully evaluate the First Home Fund, but Kevin Stuart said it had been a “huge success”.

Money available for the scheme has already been increased from £150 million to £200m, as a result of changes in the mortgage market because of Covid-19.

Would-be homeowners still have a week to apply for the first round of funding under the scheme, which requires buyers to repay the Scottish Government loan when their home is sold.

Applications close at 6pm on Friday October 2, and ministers expect the initiative will help more than 8,000 people buy their first home by the end of this year.

Cameron McKenzie was able to buy a two-bedroom flat in Pilton, Edinburgh, with money received through the scheme.

He said: “Thanks to the First Home Fund we bought our first home far earlier than we ever imagined, especially during these uncertain times.”

The fund can be used when buying a new-build or older property, and Mr Stewart said: “The pilot of our First Home Fund has been a huge success, helping thousands of people own their first home.

“The fund has been especially important since property sales resumed over the summer, and we invested a further £50m in July to help ensure that first-time buyers could still access the market despite changes to mortgages caused by the coronavirus pandemic. While the scheme is almost fully subscribed for 2020-21, I am pleased to say that I will reopen the pilot for the next financial year, and look forward to announcing further details of this in due course.

“In the meantime, first-time buyers will still be able to access shared equity schemes including Help to Buy (Scotland) and LIFT (the Low-cost Initiative for First Time Buyers), and I would encourage them to consider these options.”

The scheme comes after it was reported that house prices has seen the highest monthly rise in more than 16 years as a result of the coronavirus crisis.

After suffering losses during May and June, house prices have recovered much quicker than expected as a result of pent-up demand created during the lockdown, meaning they’ve now reached an all-time high.

August saw prices rise by around 2 per cent last month, taking the average price of a house to around £224,123.