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‘Phenomenal popularity’: Ministers urged to reopen First Home Fund to meet demand

Shona Robison, was appointed cabinet secretary for social justice, housing and local government in May 2021

Housing Secretary Shona Robison has been urged to reopen a scheme to support first-time home buyers after its “phenomenal popularity” led to it running out of money within a few days of being launched.

Industry body Homes for Scotland said the Scottish Government’s First Home Fund was needed to help meet the huge demand from those struggling to get on the property ladder.

In April, we exclusively revealed that the £60 million scheme had run out of cash within just a few days of re-opening.

The initiative, which lends people up to £25,000 towards their deposit, was launched on April 1 but was fully committed by April 8.

A property for sale in Aberdeen

The budget for the fund had been slashed from £200m last year to £60m this year, with Scottish ministers blaming a 66.5% cut in Financial Transactions from the Treasury.

Figures released to us under freedom of information laws later showed there were 2,935 approved applications for the scheme, down from 9,729 buyers last year.

Fionna Kell, director of policy at Homes for Scotland, said: “The phenomenal popularity of Help to Buy and the First Home Fund illustrates their importance across a whole range of areas.

“Clearly their central social benefit has been enabling those who would otherwise be unable to move into a new home to do so, with nearly 40% of Help to Buy purchasers previously living with family or friends.

“In addition, they have directly gone on to support tens of thousands of much-needed jobs and boosted the economy.

“As the home building and mortgage industries explore alternative routes to helping first time buyers, we urge the Scottish Government to reopen the First Home Fund to meet the demand that evidently exists, ensuring that those starting their housing journey are not locked out due to rising prices.

“We look forward to working closely with the new Cabinet Secretary for Housing Shona Robison to ensure that everyone who wants to buy a new home and can sustainably afford to do so, can do exactly that.”

The phenomenal popularity of Help to Buy and the First Home Fund illustrates their importance across a whole range of areas.”

The Help to Buy scheme can provide up to 15% of the purchase price of a new build home if certain criteria is met.

A Scottish Government spokesman said: “As a result of cuts to our Financial Transactions budget this year further to the UK Government’s Spending Review, we had to close our First Home Fund.

“Despite this the Fund is still expected to benefit more than 2,500 first-time buyers over the course of the year.

“People can access a variety of shared equity schemes to become a home owner and our first-time buyer relief for Land and Building Transaction Tax means that an estimated eight out of 10 first-time buyers will pay no tax at all.”

 

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