First time buyers have been left in the lurch after a Scottish Government shared equity scheme ran out of money in just five days.
The First Home fund opened on 1st April this year with a budget of just £60m, down from £200m in the previous year.
The First Home Fund allows buyers to own 100 per cent of their new property but the Scottish Government will contribute a maximum of 49 per cent equity stake based on a property’s value or purchase price, whichever is lower, and up to a maximum of £25,000.
The customer can then repay the equity loan at any time during its term, on sale of property, on death, or if in breach of contract.
Nicola Barclay, chief executive of Homes for Scotland said the announcement will be “a huge blow” to many in Scotland who had their hopes up for buying a new home.
John Lamont MP said:
“With property prices rising during lockdown it is now becoming even harder for first time buyers to get on the property ladder.
“It is therefore very disappointing that this flagship SNP fund ran out of cash a few days after it opened.
“I know that this has been a blow to first time buyers in the Borders as I have already had several people get in touch who were left disappointed.
“There has clearly been a huge misjudgement in demand for the scheme. The UK Government has provided the Scottish Government with £11bn in extra funding to tackle Covid-19 and to help rebuild our economy so they cannot use their usual ‘it’s all Westminster’s fault’ excuse.
“The housing market will be central to Scotland's post-pandemic recovery. The Scottish Conservatives have made a manifesto pledge for the biggest social housebuilding drive since devolution began and it is issues like these which people want our Parliament to focus on.”