The First Home Fund is a Scottish Government shared-equity scheme that helps first-time buyers onto the property ladder. It reopens by the end of June 2026 and offers up to £10,000 towards a home worth no more than £300,000. The Government takes a percentage equity share in your property, with no interest and no monthly payments. You own your home and hold the title to it. When you sell, you normally repay the Government the same percentage share of the sale price.
Saving a deposit is the single biggest hurdle most first-time buyers face. House prices have climbed, rents have eaten into savings, and many people who could comfortably afford a mortgage simply cannot bridge the gap to a deposit. The Scottish Government has now stepped in to help.
The First Home Fund is being relaunched in 2026, several years after an earlier version of the scheme closed. It is designed to give first-time buyers a financial boost towards their first home. This article explains what the First Home Fund is, how it works, who can apply and, importantly, what happens when you come to sell.
What Is the First Home Fund?
The First Home Fund is a shared-equity scheme run by the Scottish Government. You may see it written as the “First Homes Fund” in some recent coverage, but it is the return of the long-running First Home Fund. In plain terms, the Government contributes towards the cost of your first home in return for a share in it. You then own and live in the property, while the Government holds a stake in the background.
It is worth clearing up one common misunderstanding straight away. Some reports have described the scheme as an “interest-free loan”, but that is not quite right. A loan is a fixed sum you borrow and repay. A shared-equity contribution works differently, because the Government’s share rises and falls with the value of your home. We explain what that means for you later in this article.
The relaunched scheme will open for applications by the end of June 2026. According to the Scottish Government, the fund is expected to support around 50,000 households over the course of this Parliament.
How Does the First Home Fund Work?
The scheme brings together three sources of money to fund your purchase: your own deposit, your mortgage and the Scottish Government’s equity contribution. Each part plays a role, and the balance between them decides the size of the Government’s share.
Who Can Apply?
The First Home Fund is open to first-time buyers across Scotland. The Scottish 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 with someone else, the rules on whether both of you must be first-time buyers will be set out in the scheme’s application guidance.
You can use the fund to buy either a new-build home or an existing property. The home must be worth no more than £300,000, and you will need a mortgage in place to complete the purchase.
How Much Can You Get?
The Government will contribute up to £10,000 towards your purchase. You provide the rest through your deposit and your mortgage. That contribution buys the Government a percentage share of your home, rather than a fixed cash stake that never changes.
A simple example helps. Suppose you buy a home for £200,000 and the Government contributes £10,000. That contribution equals 5% of the purchase price, so the Government takes a 5% equity share. You own the remaining 95%, made up of your deposit and your mortgage.
What Are the Costs?
This is one of the scheme’s main attractions. You pay no interest on the Government’s share, and you make no monthly payments towards it. The share simply sits in the background until you sell or decide to buy it out. We look at how that works next.
What Happens When You Sell?
This is the question that matters most, and it is where shared equity differs from an ordinary loan. When you sell your home, you normally repay the Government the same percentage share it originally took. Because the share is a percentage, the amount you repay depends on what your home is worth at the time of sale, not on what you paid for it.
Return to our example. The Government took a 5% share when you bought at £200,000. If you later sell for £250,000, its 5% share is now worth £12,500, so that is what you repay. If the market had fallen and you sold for £180,000, its 5% share would be worth £9,000.
In other words, the Government shares in any rise in your home’s value, and in any fall.
Can You Repay Early?
You do not have to wait until you sell to clear the Government’s share. Under the previous First Home Fund, buyers could repay the share early, often described as “buying out” the Government’s stake. The cost of buying out the share was based on a valuation at that time. The detailed rules for the relaunched scheme are expected to follow a similar pattern, and the Scottish Government will confirm the full terms when it publishes the application guidance.
How the New Scheme Compares to the Original
The First Home Fund is not new. It first ran from 2019 and helped thousands of first-time buyers before it closed in 2021. The relaunched scheme keeps the same basic shape, but two things have changed.
First, the contribution is smaller. The original scheme offered up to £25,000, while the relaunched fund offers up to £10,000. Second, the new scheme caps the property value at £300,000, whereas the original had no upper price limit. These changes spread a fixed pot of money across more households, which fits the Government’s aim of supporting 50,000 buyers.
Don't Forget the Other Costs of Buying
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, or LBTT, is the Scottish equivalent of stamp duty. First-time buyers benefit from a relief that raises the tax-free threshold from £145,000 to £175,000. In practice, that relief can save you up to £600.
It is sensible to budget for the other costs of buying too, including your solicitor’s fees, property searches and registration dues. Our guide to buying a house in Scotland walks through the full process, and you can review our fees for residential conveyancing in advance.
Things to Weigh Up Before You Apply
The First Home Fund can make a real difference, but it is worth going 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 sell. For some buyers, that is 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. The previous scheme proved very popular and its funding ran out quickly, so early applications tend to have the best chance of success. Speaking to a solicitor early helps you understand how the scheme fits with your mortgage, your budget and your plans for the property.
Why Choose Pomphreys?
At Pomphreys, we have been helping people across Wishaw and the wider Lanarkshire area buy and sell homes since 1897. As both solicitors and estate agents, we offer something many firms cannot: a single team that handles your purchase from the first viewing through to the day you collect the keys.
That joined-up service matters for first-time buyers. You deal with people who know the local market, explain each step in plain English and keep your move on track. Whether you are using the First Home Fund or buying in the usual way, our conveyancing team is here to make the process straightforward.
Thinking About Buying Your First Home?
Our friendly conveyancing team will guide you through the First Home Fund and every other part of your purchase. Call us on 01698 373365 or get in touch through our website to find out how we can help.
Frequently Asked Questions about the First Home Fund in Scotland
When does the First Home Fund open in Scotland?
The Scottish Government has confirmed the first round of applications will open by the end of June 2026. Full details on how to apply are expected closer to the launch.
How much can I get from the First Home Fund?
You can receive up to £10,000 towards a home worth no more than £300,000. The exact amount, and the equity share it represents, depends on the price of the property you buy.
Is the First Home Fund a loan?
No. It is a shared-equity scheme. The Government takes a percentage share in your home rather than lending you a fixed sum. There is no interest, and there are no monthly payments to make.
Who counts as a first-time buyer?
A first-time buyer is someone who does not own, and has never owned, a property in Scotland or anywhere else in the world. If you have owned a home before, even abroad, you will not qualify.
What happens to the Government's share when I sell?
You normally repay the same percentage share the Government took at the start. Because it is a percentage, the repayment is based on your home’s value when you sell, so the Government shares in any gain or loss.
Can I use the First Home Fund with other schemes?
When it ran previously, the First Home Fund could not be combined with other Scottish Government shared-equity schemes. The rules for the relaunched fund will be confirmed in the application guidance, so it is worth checking before you apply.
This article is by Joe Rowan
Joe Rowan, Assistant Solicitor
Joe Rowan is an Assistant Solicitor at Pomphreys, Solicitors, Wishaw, based in our Kenilworth Avenue office. After years as a legal advisor with a football club, Joe decided it was time to get back into mainstream law, preferably in a conveyancing or private client role, areas of law he’s always enjoyed. Happily, for Joe, such a position became available at Pomphreys around the same time, and he was delighted to become part of the firm.
Tel: 01698 373365
Email: jr@pomphreyslaw.com
