The First Homes Fund shared-equity scheme will be open to all prospective owners looking to make their first step onto the property ladder, with a limit of £300,000 on the value of the property purchased.

Under the initiative, the Scottish Government will have an equity share in the property, although the homeowner will own and have title to the property. There are no monthly payments to be made towards the Scottish Government, and no interest will be charged. The Scottish Government’s percentage equity share would normally be repaid when the home is sold.

It is expected that the first phase of the fund will support 2,000 households over the first 100 days of this government and 50,000 over the course of this Parliament.

Confirming the scheme’s opening to the Scottish Parliament, cabinet secretary for social justice and housing Shirley-Anne Somerville said: “For too many people across Scotland, particularly younger people and first-time buyers, home ownership has felt increasingly out of reach. In communities the length and breadth of our nation, we are hearing the same story; people saving what they can but finding that the cost of a deposit is simply too great a barrier.

“That is the context in which this government will act. This is a direct response to the experience of people across Scotland. We have listened and are taking fast, decisive action.

“The Fund sits within a broader programme of action and supported by a record £4.9 billion investment in affordable housing over the next four years.

“We promised we would support first time buyers and we are delivering.”

Paul Hilton, the CEO of property portal ESPC, has said he is “delighted” by the announcement but added that the scheme’s reduction in value may mean that first-time buyers aren’t getting as much help as they might need to step onto the housing ladder.

Hilton said: “I am delighted to see that the First Home Fund is being brought back, and so soon into the new administration. We know that the demand for this fund is incredibly high – in fact, its last outing in 2021 had such exceptional demand that the scheme used up a year’s worth of funding in only eight days and had to close applications.

“Its successor, the OMSE scheme, reached its capacity within a month of opening. It’s evident that first-time buyers are in need of financial assistance more than ever, particularly in areas where the property prices are higher than average.

“However, my excitement at the restoration of this scheme is tinged with concern that the help offered is now worth significantly less than it was in 2021; back then, the scheme offered buyers help of up to £25,000, which has now been reduced to a maximum of £10,000.”

Hilton added: “Overall, the funds will stretch further to help greater numbers of buyers, and the threshold for property values has been increased, but obviously the impact of the support will be limited for individual buyers, as property prices have continued to rise over the last five years.

“Any assistance is better than none at all, of course, but it is worth discussing that despite the great hurrah surrounding the return of this scheme, the First Home Fund is now materially less valuable to its beneficiaries than it was five years ago.”

Shelter Scotland, meanwhile, lamented the scheme as doing little to tackle the root causes of homelessness.

Assistant director Gordon Llewellyn-MacRae said: “At a time when thousands of children are waking up in temporary accommodation, it is disappointing that the new government has used its first major intervention on the housing emergency to revive a scheme that fails to address the root causes of homelessness.

“Instead, the government should use its first 100 days to set out a radical approach to deliver new social homes, uphold people’s rights, and tackle the racism and bias in our housing system - not repeating policies that do nothing to help the 10,480 children trapped in temporary accommodation.”

He added: “Evidence shows these interventions inflate house prices, boost developer profits and largely benefit higher earners, while offering little support to those most in need.

“The government must prioritise investment in at least 15,693 social homes each year and properly support homelessness services that are under enormous pressure. It is wrong to prioritise help for first-time buyers over people with nowhere safe to call home.”