First time buyers in Scotland will receive financial help from the Scottish government to buy a property under a recently launched pilot scheme.
The First Home Fund will provide first-time buyers with up to £25,000 to help them buy a property through a shared equity scheme.
The scheme is expected to help at least 6,000 buyers get onto the property ladder, with £150m of funding to be made available between now and March 2021.
All first time buyers in Scotland can apply for funding from the First Home Fund. Anyone who has previously owned a home in the UK or abroad at any time will not be eligible. The scheme can be used to help buy both new build and existing properties.
To take part in the scheme, buyers must have a deposit of at least 5% of the property value, and their mortgage must be at least 25% of the purchase price. Buyers will own the property outright, although the Scottish Government will have an equity share in it.
Which lenders will offer mortgages for the First Home Fund?
Several lenders have already agreed to offer mortgages for the First Home Fund.
The following have signed up so far:
• Bank of Scotland
• Glasgow Credit Union
• Leeds Building Society
• Scottish Building Society
• Scotwest Credit Union
How is the government contribution repaid?
Homebuyers won’t have to make monthly payments or interest payments to the Scottish government for their contribution.
Instead, the share provided by the government will normally be repaid when the property is sold.
For example, if the buyer buys 80% of the property's value through a deposit and a mortgage, the Scottish government will hold a 20% share. When the property is sold, the government would receive 20% of the final sale price and the owner 80%.
Homeowners can choose to increase their equity share over time if they want to.
You can find out more about how the First Home Fund works here. Applications to the scheme can be made through the Link Housing website.
Scottish first time buyers given leg up onto property ladder