TL;DR
Scotland's £10,000 first home deposit scheme is facing criticism over affordability concerns, with property analysts arguing the grant is insufficient to address the gap between typical deposit requirements and first-time buyer savings in Scottish cities. The scheme, administered by the Scottish Government under the First Home Fund, provides a £10,000 equity loan to first-time buyers. Critics note that average property prices in Edinburgh and Glasgow require deposits well above £10,000 even at 5 percent LTV.
Last reviewed: 27 June 2026 | Sources: Scottish Government, mygov.scot, Registers of Scotland, GOV.UK
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Key Facts Scotland deposit scheme: £10,000 equity loanAverage Edinburgh price: ~£320,000 (Jun 2026)5% deposit on avg Edinburgh: ~£16,000Administered by: Scottish Government / Link Group |
What the Scotland deposit scheme provides
The Scottish Government's First Home Fund provides eligible first-time buyers with an equity loan of up to £10,000 towards the deposit on their first home in Scotland. The loan is interest-free and is repaid when the property is sold or the mortgage is repaid. The scheme is administered by Link Group on behalf of the Scottish Government and is available on new-build and second-hand properties up to a maximum purchase price.
The scheme is designed to help first-time buyers who have saved some deposit but cannot reach the level required by mortgage lenders. By providing an equity loan that sits alongside the buyer's own deposit, the scheme aims to reduce the savings gap for buyers who are close to but not quite at the threshold required for a mortgage. The Scottish Government retains an equity share proportional to the contribution made.
Why critics say £10,000 is insufficient
Property analysts raise concerns that the £10,000 maximum falls short of the actual deposit gap facing first-time buyers in Scotland's main cities. Average property prices in Edinburgh reached approximately £320,000 in June 2026, meaning a 5 percent deposit is around £16,000 and a 10 percent deposit is £32,000. In Glasgow, average prices are lower at around £185,000, making the 5 percent deposit approximately £9,250 -- within the scheme's reach -- but the 10 percent deposit of £18,500 still exceeds it.
Mortgage lenders offering 95 percent LTV products often charge higher rates than 90 or 85 percent LTV products, meaning buyers using the scheme at the minimum deposit level may face higher monthly repayments than those who save a larger deposit. The affordability concern is not just about reaching the deposit threshold but about the ongoing mortgage cost for buyers who use the scheme to enter the market at maximum LTV.
How the scheme compares to England's equivalent
England's Help to Buy equity loan scheme closed to new applicants in March 2023. The Mortgage Guarantee Scheme -- which incentivises lenders to offer 95 percent LTV mortgages -- was extended in the UK Autumn Statement 2025 to December 2026. In Wales, the Help to Buy Wales scheme similarly provides equity loans for new-build purchases. Scotland's First Home Fund operates on both new-build and second-hand properties, which is a broader eligibility than the original Help to Buy scheme in England, which was restricted to new-builds.
Eligibility and how to apply
To be eligible for the Scottish Government's First Home Fund, applicants must be first-time buyers purchasing a property in Scotland, the property must be the applicant's only home, and the purchase price must be within the scheme's maximum price cap. Applicants must have their own mortgage offer in place. The application is made through Link Group and must be submitted before missives are concluded. The equity loan cannot be used in conjunction with all other Scottish Government mortgage support products -- check current compatibility rules at mygov.scot before applying.
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Disclaimer This article is for information only and does not constitute financial, tax or legal advice. Kael Tripton Ltd is an independent editorial publisher and is not regulated by the FCA. |
Frequently asked questions
What is the Scotland First Home Fund?
The First Home Fund is a Scottish Government scheme providing an equity loan of up to £10,000 to eligible first-time buyers in Scotland towards their deposit. The loan is interest-free and is repaid when the property is sold or the mortgage is paid off. The Scottish Government retains an equity share proportional to its contribution.
Can I use the Scotland deposit scheme on any property?
The First Home Fund is available on both new-build and second-hand residential properties in Scotland, subject to a maximum purchase price cap. This is broader than the original Help to Buy scheme in England, which was restricted to new-builds only. Check the current maximum price cap at mygov.scot as this is subject to periodic review.
Does the £10,000 cover a full deposit in Scotland?
In most Scottish cities it does not cover a full 5 percent deposit on its own. In Glasgow, where average prices are around £185,000, the scheme combined with some savings can reach the 5 percent threshold. In Edinburgh, where average prices are around £320,000, a 5 percent deposit is approximately £16,000, meaning the buyer needs an additional £6,000 of their own savings on top of the scheme's £10,000.
How is the Scotland deposit loan repaid?
The First Home Fund equity loan is repaid when you sell the property or repay the mortgage in full. The repayment amount is proportional to the Scottish Government's equity share -- if the government provided 3.7 percent of the purchase price, it receives 3.7 percent of the sale price regardless of whether property values have risen or fallen.
Is the Scotland deposit scheme compatible with other schemes?
The First Home Fund cannot be used in conjunction with all other Scottish Government mortgage support products. Check current compatibility rules at mygov.scot before applying, as the scheme rules are subject to change. It can generally be used alongside mainstream 95 percent LTV mortgage products from participating lenders.
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Sources Scottish Government: First Home Fund |
