The First Homes Fund Explained: £10,000 Towards a First Home in Argyll
The Scottish Government’s First Homes Fund opened to applications on 24 June 2026, offering first-time buyers up to £10,000 towards the cost of buying their first home. It is a shared equity scheme rather than a loan, so there are no monthly repayments and there’s no interest to worry about. The rules, though, are rather more particular than the headline suggests, and one of them comes with a very narrow window attached. Here is what buyers in Dunoon, Cowal and the wider Argyll area need to know.
What is the First Homes Fund?
The First Homes Fund is a shared equity scheme backed by £500 million of Scottish Government funding over the course of this Parliament. It opened on 24 June 2026 and is expected to help around 50,000 households onto the property ladder, with up to 2,000 supported in the first hundred days alone.
One point is worth clearing up straight away, because it is causing genuine confusion. This is not the old First Home Fund. That scheme ran from December 2019 until March 2022 and contributed up to £25,000. The new First Homes Fund is a separate scheme with its own rules, and the contribution is up to £10,000 towards a property with a home report value of no more than £300,000.
How the equity share works
The Scottish Government puts in up to £10,000 and takes an equity share in your home in return. The size of that share depends on what you pay. Buy at £100,000 with the full £10,000 and the Government holds ten per cent. Buy at £200,000 with the same £10,000 and it holds five per cent.
You still own the property in every practical sense. The title is in your name, you hold the deeds, there are no monthly payments to the Government and no interest is charged. Its share sits as a security over your home and is repaid when you sell, or when another payment event under the shared equity agreement is triggered.
Because the repayment is a percentage rather than a fixed sum, it moves with the market. If the Government holds ten per cent and you later sell at £190,000, it receives £19,000 rather than the original £10,000. If values fall, it receives less. That is the trade for having no interest and no monthly cost, and it is worth understanding properly before you commit.
You can also buy the Government out over time. You are free to increase your share whenever you like, in steps of at least five per cent, with a home report valuation required each time. Once you hold 90 per cent or more, the only remaining step is to go to 100 per cent, at which point the Government has no further interest in your home.
Who can apply
The scheme is aimed squarely at first-time buyers. For these purposes that means 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, only one of you needs to meet that definition. If the other party currently owns a property, it must be sold before your purchase completes, so it is worth talking to us early about getting that property on the market in good time.
Beyond that, the main conditions are:
The home report value must be no more than £300,000
There are no restrictions on the age or the location of the property
Only one application is permitted per property, and a joint application still attracts only one award of up to £10,000
The property must be your only residence, so buy to let purchases are excluded
The mortgage conditions
You need a mortgage, and it has to meet some specific requirements:
It must cover at least 25 per cent of the purchase price
It must be a capital repayment mortgage, not interest only
Your mortgage payments must not exceed 45 per cent of your net income
You will usually need a deposit of your own of around five per cent as well. Cash buyers cannot use the scheme at all, because the Government’s share is protected through the mortgage arrangement.
The lenders currently offering mortgages through the scheme are Bank of Scotland, Glasgow Credit Union, Halifax, Leeds Building Society, Lloyds Bank, NatWest, Scottish Building Society and Skipton Building Society. The list has already grown since launch and more are expected to join, so it is worth checking the position when you come to arrange your finance.
The timing point that catches people out
This is the part that matters most, and it is where having a solicitor involved early genuinely earns its keep.
You cannot apply until you have had an offer accepted. A verbal acceptance is enough and you do not need written confirmation. But you also cannot apply once missives have been concluded and a date of entry agreed.
That leaves you a window: after acceptance, and before conclusion. In Scotland that window can close very quickly, particularly on a keenly contested property where both sides are keen to tie things up. If you intend to use the First Homes Fund, you need to say so at the outset rather than mentioning it once the paperwork is already moving.
Our view has always been that the single most important thing you can do when buying property in Scotland is to speak to a solicitor before you show your hand in price negotiations. The First Homes Fund makes that advice a good deal more pressing. Have a word with our residential property team before an offer goes in, not afterwards.
Costs, deadlines and how to apply
Applications are made online through Link Housing. You can apply yourself, or ask an independent financial adviser or mortgage adviser to apply on your behalf. To complete the application you will need your solicitor’s details, a mortgage decision in principle, evidence that your mortgage payments will not exceed 45 per cent of your net income, and either the home report for an open market purchase or the reservation agreement for a new build.
If your application succeeds you will receive an award letter valid for three months. You must agree your date of entry within that period, or the letter lapses and you have to apply again from scratch.
There is also a fee of £650, payable once you have your award letter. That sits alongside your legal fees, registration dues and Land and Buildings Transaction Tax, so it is worth building into your budget from the start. Our price transparency guide sets out what we charge.
Do not overlook first-time buyer tax relief
Quite separately from the Fund, first-time buyers in Scotland benefit from LBTT relief that lifts the nil rate threshold from £145,000 to £175,000. The maximum saving is £600, and your solicitor claims it as part of the return submitted to Revenue Scotland within the 30 day deadline.
There is a catch worth knowing about, because the two schemes define a first-time buyer differently for joint purchases. The First Homes Fund needs only one of you to qualify. LBTT first-time buyer relief requires all buyers to qualify. So a couple where one party has owned a home before can still use the Fund, but they will not get the tax relief. It is a small sum in the scheme of things, but nobody enjoys an unexpected £600 on a completion statement.
Can you combine it with other help?
The First Homes Fund cannot be used alongside the other Scottish Government schemes, such as the Open Market Shared Equity scheme or New Supply Shared Equity. You can, however, put a Lifetime ISA or a Help to Buy ISA towards your deposit at the same time, which for many buyers is the more useful combination anyway.
Why the £300,000 cap suits this part of Scotland
In some parts of the country the £300,000 ceiling will bite. Around here it is generous. Recent prices suggest that the large majority of homes changing hands across Argyll and Bute, and first-time buyer purchases in particular, sit comfortably below the cap. For most buyers on this side of the Clyde it is simply not the constraint it might be in Edinburgh or the west end of Glasgow.
The absence of any restriction on the age or location of the property matters too, in an area with as much traditional and older housing stock as Cowal. A Victorian flat on the seafront is every bit as eligible as a new build. Most of what appears in our current property listings falls comfortably within the scheme.
How Stewart & Bennett can help
A shared equity purchase has rather more moving parts than a straightforward one. Alongside your lender’s standard security, there is a shared equity agreement and a second security in favour of Scottish Ministers to prepare and register, and all of it has to tie together properly at settlement.
We will examine and report on the title, deal with both securities, claim your LBTT relief and file the return on time, and explain the longer term consequences: what happens when you eventually sell, what is involved in buying out the Government’s share, and the restrictions on letting the property. Most importantly, we will help you get the timing right, because that is where the scheme is least forgiving.
If you are thinking about buying your first home in Dunoon or anywhere across Cowal and Argyll, get in touch. We are at 82 Argyll Street, right in the heart of the town, and we would be glad to talk it through before you make an offer. You can also read the official scheme details on mygov.scot.
Frequently asked questions
Is this the same as the old First Home Fund?
No. It is a different scheme with different rules. The old First Home Fund ran from December 2019 until March 2022 and offered up to £25,000. This one offers up to £10,000.
Do I have to make monthly payments?
No, and no interest is charged. The Government’s equity share is repaid when you sell your home, or when another payment event under the shared equity agreement is triggered.
We are buying together and my partner has owned a property before. Can we still apply?
Yes, provided at least one of you is a first-time buyer and any property your partner owns is sold before your purchase completes. Bear in mind you will not qualify for LBTT first-time buyer relief in that situation.
When exactly should I apply?
After your offer has been accepted, and before missives are concluded and a date of entry agreed. Speak to us before you offer so the timing works in your favour.
Can I rent the property out later?
No. The home is expected to be your only residence, and renting or subletting is not permitted under the scheme.
How much does it cost to apply?
There is a fee of £650, payable once you receive your award letter. Legal fees, registration dues and LBTT are all separate.