Homes scheme closes
Dismay as first time buyer fund runs out of cash
Nicola Barclay: disappointed
Housing leaders have expressed dismay that a Scottish Government scheme to help first-time buyers has allocated its entire fund just a week after it launched.
The First Home Fund opened for applications on 1 April, lending homebuyers up to £25,000, but has already closed after being “fully committed”.
The budget for the fund was slashed from £200m last year to £60m this year, with Scottish ministers blaming a 66.5% cut from the Treasury.
Link, the housing association which runs the scheme for the Scottish Government, said: “Any applications in progress but not yet submitted at point of closure are unable to be processed.”
The fund’s closure, first reported by the P&J, was greeted with disappointment by Nicola Barclay, chief executive of industry body Homes for Scotland. She said: “This will clearly be very disappointing news to all those people who had been hoping that the First Home Fund would enable them to get onto the property ladder.
“We anticipated that there would be huge demand given the success of the pilot scheme run last year. Despite this, the Scottish Government allocated just 30% of the levels spent in 2020, citing budget cuts from Westminster for the reduction.
“This also comes on top of the closure of the hugely successful Help to Buy scheme and will be a huge blow to all those who aspire to own their own home.
“The lack of availability of 95% LTV mortgages has made it incredibly difficult for first time buyers to access mortgage finance, despite strong evidence that shows that owning a home is often cheaper than renting.”
Ms Barclay said would be “urgently” calling on Kate Forbes to take immediate action to support all those affected.
Greig Brown, mortgage operations director at Aberdein Considine, one of Scotland’s largest property and mortgage firms, said concerns had been raised about the cut to the fund.
“This has been a hugely popular scheme and has helped thousands of first-time buyers plug the gap in their deposit – there will be many hundreds, if not thousands, of buyers left disappointed by this news,” he said.
A Scottish Government spokesman said: “The First Home Fund has now closed to new applications as the allocated 2021-22 budget for the fund has been fully committed.
“As previously said, the total Scottish Government Financial Transactions budget in 2021-22 was cut by almost two thirds as a result of the UK Government’s Spending Review in November.
“As such, difficult choices have had to be made including reduced funding for the First Home Fund in 2021-22 and the closure of the main Help to Buy scheme.”