Saving a deposit is the biggest obstacle facing most first-time buyers. Rents have risen, house prices have climbed, and plenty of people who could comfortably manage a mortgage simply cannot bridge the gap to a deposit. The Scottish Government has now stepped in with the return of the First Home Fund.

What Is the First Home Fund?

The First Home Fund is a shared-equity scheme run by the Scottish Government. In plain terms, the Government contributes towards the cost of your first home and, in return, takes a share in it. You own the property and hold the title to it, while the Government holds a stake in the background.

The scheme is not new. It first ran from 2019 and helped thousands of first-time buyers before closing in 2021. The relaunched version keeps the same basic shape, with two notable changes: 

• First, the contribution is smaller: the original offered up to £25,000, whereas the new fund offers up to £10,000. 
• Second, the new scheme caps the property value at £300,000, while the original had no upper price limit. 

These changes spread a fixed pot of money across more households, in line with the Government's aim of helping 50,000 buyers.

It is also worth noting that some reports have described the scheme as an interest-free loan, but that is not quite accurate. A loan is a fixed sum that you borrow and repay. A shared-equity contribution behaves differently, because the Government's share rises and falls with the value of your home. See below.

According to the Scottish Government, the fund is expected to support around 2,000 households in its first 100 days and 50,000 over the course of this Parliament.

When Does It Open, and Who Can Apply?

The first round of applications is due to open by the end of June 2026. 

The scheme is aimed at first-time buyers across Scotland. The Government defines a first-time buyer as someone who does not own, and has never previously owned, a property in Scotland or anywhere else in the world. If you are buying jointly, the application guidance will set out whether both buyers must meet that test.

You can use the fund to buy either a new-build or an existing property, and you will need a mortgage in place to complete the purchase. The home must be worth no more than £300,000.

How Does the Scheme Work?

The Government will contribute up to £10,000 towards your purchase. You provide the rest through your own deposit and your mortgage. That contribution buys the Government a percentage share of your home rather than a fixed cash sum.

You pay no interest on the Government's share and make no monthly payments towards it. The share simply sits in the background until you sell or choose to buy it out.

It is important to consider what happens when you come to sell the property, and this is where shared equity differs from an ordinary loan. When you sell, you would normally repay the Government the same percentage share it took at the outset. Because the share is a percentage, the sum you repay depends on what your home is worth at the time of sale, not on what you originally paid.

The full terms, including how the share is valued on sale, will be set out in the scheme's application guidance. We would always recommend taking advice on the detail before you commit.

What About LBTT and Other Costs?

The First Home Fund helps with your deposit, but it is not the only support available to first-time buyers in Scotland. 

Land and Buildings Transaction Tax (LBTT), Scotland's property-purchase tax, includes a first-time buyer relief that raises the tax-free threshold from £145,000 to £175,000. In practice, that relief can save a qualifying first-time buyer up to £600.

It is sensible to budget for the other costs of buying too, including your; 

• legal fees, 
• property searches and 
• registration dues. 

Paris Steele's guide to buying a property in East Lothian walks you through the process and, as the scheme requires a mortgage, it is also worth arranging mortgage advice at an early stage.

Things to Weigh Up Before You Apply

The First Home Fund can make a real difference, but it pays to go in with your eyes open. Because the Government holds an equity share, you give up part of any increase in your home's value when you come to sell. For some buyers, that may be a fair trade for getting onto the ladder sooner; for others, it may not suit their longer-term plans.

Demand is also likely to be high. When the scheme last ran, its funding was committed remarkably quickly, so being ready to move counts. Speaking to a solicitor early helps you understand how the scheme fits with your mortgage, your budget and your plans for the property.

How Paris Steele Can Help

At Paris Steele, we have been helping people across East Lothian buy and sell homes for generations. As both solicitors and estate agents, we can guide you through every stage of your first purchase, from your first viewing to the day you collect the keys. Whether you intend to use the First Home Fund or buy in the usual way, our Residential Property team is here to make the process straightforward and to make sure you are properly protected.

To talk through your first purchase, contact our offices in North Berwick on 01620 892138 or Dunbar on 01368 862746, or get in touch through our website.