A Scottish broker says the revived scheme's £10,000 contribution limit is rarely changing what clients can actually achieve
The return of Scotland's First Homes Fund has drawn considerable interest from first-time buyers since its relaunch at the end of June, but brokers are finding that the scheme's £10,000 maximum contribution is having a more limited practical impact than its predecessor.
According to Alan MacKenzie (pictured top), director at East Kilbride mortgage broker Your Next Step, the scheme had prompted a steady flow of enquiries, but that conversations with clients had not played out as anticipated.
"The interest has certainly been there," he said. "We've had plenty of enquiries from buyers asking about it, and that's encouraging. However, the conversations we've been having with clients haven't quite been the ones we expected."
A recurring issue MacKenzie has encountered is buyers treating the contribution as a straightforward cash benefit. In practice, the Scottish Government takes an equity stake in the property in return for its contribution, meaning it participates in any future increase in the home's value.
"Some buyers perceive the £10,000 contribution as 'free money'," MacKenzie said. "That's understandable when you see headlines or social media posts highlighting the scheme, but it isn't an accurate way to think about it. We believe that's a crucial point, and one that buyers need to fully understand before deciding whether the scheme is right for them."
He noted that the £10,000 ceiling under the revived First Homes Fund — less than half the £25,000 maximum available under the previous iteration of the fund — means the scheme rarely alters the fundamentals of a client's mortgage position. Buyers must still meet lender affordability criteria, provide their own deposit where required, and often have additional funds available to cover bids above Home Report valuations in Scotland's competitive market.
"For many of the clients we're currently advising, it isn't materially changing the overall mortgage structure," MacKenzie said. "In many cases, the £10,000 simply reduces the mortgage required rather than fundamentally changing what is achievable."
That stands in contrast to the earlier scheme, where larger contributions had a more tangible effect on what buyers could achieve. MacKenzie said the experience had increasingly led him to pose a direct question to clients: "Do you actually need it?"
"If a client can achieve their purchase without entering into a shared equity arrangement, that's often the route we're encouraging them to explore first," he added.
His caution stems not from a fundamental objection to the scheme but from the additional complexity shared equity arrangements can introduce over time — including remortgaging, buying back the government's equity stake, and making structural changes to a property.
MacKenzie said independent advice had become more important as a result. "The mortgage market is moving quickly, lender criteria continue to evolve, and government initiatives are becoming increasingly nuanced," he stressed.
"Clients don't just need someone to explain how a scheme works; they need someone to help them understand whether it's genuinely the right solution for their own circumstances."
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