A funding cut led to a huge drop in the number of first-time buyers who were helped by a flagship Scottish Government scheme this year, it can be revealed.
Figures released under freedom of information laws show that there were 2,935 approved applications for the hugely popular First Home Fund last month.
It represented a 70% fall on the 9,729 buyers who were helped by the scheme in 2020/21.
The drop reflected a similar-sized reduction in funding for the initiative, from £200 million last year to £60m in 2021/22.
Last month, we exclusively revealed that the First Home Fund had run out of cash within days of re-opening on April 1, due to the level of demand.
Data released by the government now shows that there were 2,897 applications made to the funding pot in the short period that it was available.
A further 138 approved applications were carried over from the previous financial year, giving a total of 3,035 applications for funding in 2021/22.
As of May 10, a total of 2,935 of the applications had been approved, while 31 were unprocessed and 69 had been withdrawn.
Concerns around ‘early closure’
The Scottish Government also confirmed it has received 97 letters and emails about the fund since it reopened, with the majority concerning its “early closure”.
The scheme helped people struggling to get on the property ladder by providing an interest-free equity loan worth up to £25,000 towards the purchase of a property by a first-time buyer, with the money normally being repaid when the property is sold.
An escalating housing crisis was repeatedly highlighted in focus group and opinion poll research carried out for Survation to inform our election coverage over recent weeks.
Scottish ministers previously blamed the reduction in support for the First Home Fund on a 66.5% cut in Financial Transactions from the Treasury.
I think the fund could have been fully subscribed two or three times over, such is its popularity.”
Alan Cumming, national estate agency director at property and mortgage firm Aberdein Considine, said there was significant demand for such support for first-time buyers.
“I think the fund could have been fully subscribed two or three times over, such is its popularity,” he said.
“However, a number of 95% mortgage deals are coming to the market to assist first-time buyers and fill the funding gap left behind by the fund closing.”