First Homes Fund Scotland: What First-Time Buyers Need to Know (2026 Update)

First Homes Fund Launching in Scotland

The Scottish Government has confirmed the launch of the First Homes Fund, a new shared equity scheme designed to help more people take their first step onto the property ladder.

The first applications are expected to open by the end of June 2026, with the scheme offering financial support of up to £10,000 towards a deposit for eligible first-time buyers.

This initiative forms part of a wider commitment to increasing home ownership opportunities across Scotland.

Support for First-Time Buyers

The First Homes Fund has been introduced in response to ongoing affordability challenges faced by first-time buyers, particularly around saving for a deposit.

The scheme aims to support households who can afford mortgage repayments but are struggling to raise the upfront funds required to buy a home.
 

It is expected to support:

• Around 2,000 households in the first 100 days
• Up to 50,000 first-time buyers over the course of the current Parliament

How the First Homes Fund Works

The First Homes Fund operates as a shared equity scheme, meaning the Scottish Government provides financial assistance in exchange for a small equity stake in the property.

Key features include:

• A £10,000 Government contribution towards a deposit
• Available on homes valued up to £300,000
• Open to both new-build and existing properties
• No monthly repayments required
• No interest charged on the Government contribution
• Government equity is repaid when the property is sold (or earlier if agreed)

Although the Government holds a share in the property, the buyer has full ownership and is registered as the legal title holder.

Who is eligible?

To qualify for the First Homes Fund, applicants must generally be:

• A first-time buyer
• Someone who does not currently own, and has not previously owned, a property anywhere in the UK or abroad
• Purchasing a property in Scotland
• Buying a home with a mortgage
• Within lender affordability requirements

The scheme is open to a wide range of applicants, with no requirement for ongoing repayments.

What properties are included?

The First Homes Fund can be used to purchase:

• New-build homes
• Existing properties on the open market

The property must:

• Be located in Scotland
• Have a purchase price of up to £300,000
• Be intended as the buyer’s main residence

This gives buyers flexibility across a wide range of housing types and locations.

What does shared equity mean?

Under this scheme, the Scottish Government contributes part of the purchase price and retains a percentage stake in the property.

However:

• The buyer owns and lives in the property
• No rent or monthly payments are required for the Government share
• The equity share is usually repaid when the home is sold
• If the property value increases, the Government receives a proportional share of that growth

This structure helps reduce the upfront barrier of a deposit while still supporting long-term home ownership.

Why the scheme has been introduced

The First Homes Fund has been created in response to rising housing costs and the increasing difficulty many first-time buyers face when trying to save for a deposit.

The Scottish Government has stated that the scheme forms part of a wider housing investment programme, supported by a significant multi-billion-pound commitment to affordable housing across the country.

The aim is to make home ownership more accessible, particularly for younger buyers and those currently renting.

What this means for first-time buyers

For buyers in Scotland, this scheme could provide:

• A reduced upfront deposit requirement
• Faster access to home ownership
• Greater buying power in competitive markets
• Support for both new-build and existing homes

However, buyers should still consider:

• Mortgage affordability and lending criteria
• Long-term equity repayment obligations
• How shared equity may affect future selling decisions

Important considerations

While the scheme offers valuable support, it is important to understand how shared equity works in practice:

• The Government retains a financial interest in the property
• The amount repaid depends on the property’s value at the time of sale
• Legal and valuation processes are required when repaying equity
• Buyers should seek independent financial advice before applying

Final thoughts

The First Homes Fund represents a significant new step in supporting first-time buyers across Scotland, offering a £10,000 contribution towards deposits and aiming to make home ownership more achievable for thousands of households.

With applications expected to open by the end of June 2026, it is likely to become an important route onto the property ladder for many buyers across the country.

Thinking about buying your first home?

At Eversley Property, we help first-time buyers understand the full range of support available, including Government-backed schemes, mortgage options and local property advice across Dundee and surrounding areas.

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