A fund that focused on helping first-time buyers get onto the property market closed in just five days after a huge rush of demand on the scheme, leading to criticism from property managers and letting agents in Scotland.
The First Home Fund, a shared equity scheme that provides up to £25,000 towards the purchase of a buyer’s first home, which can either be a new build or an existing property.
Much like the similar Help to Buy scheme and other mortgage guarantee systems that have been set up, a buyer must provide a minimum deposit for 5 per cent of the purchase price, and a mortgage must account for over a quarter of the remaining price.
Whilst the scheme was a shared equity scheme which means that the Scottish Government owns a share in your property, successful applicants would not need to pay back the money unless they sell their home or choose to increase their equity share in the property.
The scheme is expected to help more than 2,500 people, although due to a cut in the budget for the fund from £200m down to just £60m, the fund was quickly used up.
The scheme was criticised by property managers for lacking enough safeguards to ensure people could take advantage of the scheme, arguing that it should have been means-tested better and did not allow companies to prepare applications far in advance and create a deluge of applications.
According to the latest house price index from Rightmove, pent up demand has continued to increase the price of housing, with the average price of a home in Scotland rising to over £165,000.