The Scottish Government’s First Homes Fund has now been fully reopened for over a month, giving us a chance to see how the scheme is working in practice and to assess if it really is the silver bullet we need to boost the housing market.

There’s no doubt the fund is a genuine help for first-time buyers, but the reality is it won’t fix affordability on its own without wider reform of property taxation. The fund is offering eligible first-time buyers a government contribution of up to £10,000 towards a property worth up to £300,000.

The government takes an equity stake in return, repaid when the property is sold, and buyers must still find a minimum personal deposit of 5%.

The Scottish Government is confident the fund will support around 2,000 households in its first 100 days, with an ambition to reach 50,000 buyers over the course of this Parliament. A month in, solicitor estate agents across our network are telling us the fund is bringing people into the market who would otherwise still be saving. That’s exactly what it’s there to do.

It’s also worth remembering what happened the last time round. The original First Homes Fund launched in December 2019 with up to £25,000 available per buyer. It closed, then reopened in April 2021 with a reduced budget, and that reopening used up a year’s worth of funding in just eight days.

The Open Market Shared Equity scheme, one of the government’s other longstanding shared equity routes for first-time buyers, has shown the same pattern: its most recent reopening was paused for new applications just a month after it opened. So the appetite for this kind of support isn’t new and it isn’t insignificant.

What’s different this time is the shape of the scheme rather than the scale of the problem. A smaller award, spread across more buyers over a longer period, should mean fewer people missing out to a funding cliff-edge the way they did before. That’s a sensible way to design it. But it also means £10,000 buys a first-time buyer less than £25,000 did in 2021, at a time when prices, particularly in Edinburgh and East Lothian, have kept climbing. The fund goes further as a policy, but for any one
buyer, it goes less far.

ESPC lobbied for the fund’s return and expansion ahead of the May Holyrood election, pointing to sustained demand for deposit support among first-time buyers, especially in higher-value parts of its operating area. The early weeks of the relaunched scheme back that up, but that deposit support only addresses one half of what a first-time buyer pays at the point of purchase.

Deposit help and LBTT are two sides of the same problem, and right now only one of them is being looked at. We’ve been calling for LBTT to move to regional, or zonal, bands that actually reflect property prices across Scotland, rather than one national scale applied everywhere. A buyer in Edinburgh pays a higher effective rate of tax than a buyer in the Borders or Dumfries and Galloway, purely because prices here are higher, even though the tax is meant to scale with what people can afford. If the government wants first-time buyers to feel real change, LBTT reform alongside a scheme like this would do far more than either on its own.

ESPC has also called separately for a temporary holiday on the Additional Dwelling Supplement to support landlords, as part of its wider public affairs work on property taxation. None of this takes away from the fund itself. Any help with a deposit matters, and we’d rather see it running well than not exist at all. But if buyers are going to feel the difference rather than just read the headline, deposit schemes and tax reform need to happen together, not in isolation.