Scotland’s new First Homes Fund is due to open by the end of June, offering first time buyers up to £10,000 toward the deposit on a first home. The scheme may help some households cross the threshold into ownership, but it lands inside a housing emergency where supply, affordability and regional pressures remain far larger than one deposit measure can resolve. A £10,000 contribution is useful for buyers. The concern is whether helping demand without fixing supply risks lifting more people into a strained market rather than making that market work better.
Scotland’s new First Homes Fund is expected to open for applications by the end of June, offering first time buyers a Scottish Government contribution of up to £10,000 toward the purchase of a first home.
The scheme will apply to new build and existing homes bought with a mortgage, with a property value limit of £300,000. It is a shared equity model, meaning the buyer owns and holds title to the home, while the Scottish Government takes an equity share that would normally be repaid when the property is sold. No monthly payments or interest are due to the Government during ownership.
The Government says the first phase is expected to support 2,000 households in its first 100 days and 50,000 first time buyers over the course of the Parliament. It has placed the scheme within a wider housing programme that includes £4.9 billion for affordable housing over four years.
There is a practical case for the policy. The deposit remains one of the main barriers to ownership, especially for younger buyers paying rent while trying to save. A £10,000 contribution could be decisive for a household close to buying but unable to complete the final part of the deposit. It may also help buyers without family wealth, which matters in a housing market where the so called bank of mum and dad has quietly become a private welfare state.
But Scotland’s housing problem is also a shortage problem, a regional affordability problem, a rented sector problem, a homelessness problem and a construction problem. A policy that helps buyers enter the market may be welcome, but it does not create enough homes by itself.
The Scottish Parliament backed the declaration of a national housing emergency in May 2024, and its Local Government, Housing and Planning Committee records that fourteen local authorities have also declared local housing emergencies, beginning with Argyll and Bute in 2023 and most recently Dundee in March 2026.
Housebuilding has also weakened. Scottish Government statistics show that 17,336 new homes were completed across all sectors in 2025, down 13 per cent from 2024, while 14,999 were started, down 6 per cent. In the social sector, completions fell 25 per cent and starts fell 15 per cent. Private sector completions were the lowest since 2017, while private starts were the lowest since 2013, excluding the Covid affected year.
That is the context in which the First Homes Fund should be judged. If it helps people buy homes that already exist, it may change who succeeds in a competitive market without increasing the number of homes available. If it supports new build purchases, it may help developers and buyers, but only if the homes are in the right places, at prices households can carry, and in enough volume to matter.
The £300,000 property cap also needs a regional reading. Registers of Scotland reported that the average price of a property in Scotland was £187,000 in March 2026, up 1.6 per cent on the year. On that national figure, the cap appears generous. But housing pressure is not evenly spread. The UK House Price Index shows Edinburgh’s average house price at £290,000 in March 2026, leaving far less room beneath the cap in Scotland’s most expensive local authority area. Inverclyde, by contrast, was the cheapest area at £113,000.
A national scheme can feel very different depending on where a buyer lives. In lower price areas, £10,000 may be a substantial boost. In Edinburgh, parts of East Lothian, the Highlands, island communities and pressured commuter areas, it may help but still leave many households facing high prices, limited supply or competition from cash buyers, investors and second home demand.
There is history here too. Scotland has used shared equity support before. The previous First Home Fund, now closed, offered up to £25,000 to first time buyers, while the Low Cost Initiative for First Time Buyers remains available. The earlier First Home Fund was launched as a pilot in 2019 with £150 million and later reopened in 2021 with a £60 million budget before closing rapidly after heavy demand.
That history gives the new scheme two lessons. First, demand for help is likely to be strong. Second, deposit assistance is attractive because it is visible and quick, but the harder housing work remains slower: building more homes, bringing empty homes back into use, funding social housing, speeding appropriate planning, improving infrastructure and keeping communities livable for workers as well as owners.
None of this makes the First Homes Fund a bad policy. A household that can buy because of the scheme will be grateful. It may mean security, stability and the first real stake in a community.
But Scotland should be clear eyed. A housing emergency cannot be solved by helping some households bid in a market that is still short of homes. The fund will matter most if it is part of a larger correction: more supply, more affordable homes, better regional planning, and a serious answer to the question of how young Scots are supposed to live in the places where they work.
