The Scottish Government’s First Homes Fund offers eligible buyers up to £10,000 towards a home costing up to £300,000. It is shared equity support, not a cash gift or a replacement for the deposit your lender requires. Check current availability and your borrowing position before making an offer in Annan.
Eligible first-time buyers can claim an LBTT nil-rate threshold of £175,000. The relief has separate conditions from the fund, including conditions for every joint buyer. Ask your solicitor to calculate the tax on your particular transaction.
At Hunters Annan, we’ve helped many first-time buyers navigate the Scottish buying process. This guide breaks down exactly how the First Homes Fund works, what it means for buyers in Annan, and how to take your next step with confidence.
What is the First Homes Fund?
The fund takes a percentage stake based on its contribution to the home’s value or buying price, whichever is lower. There are no interest or monthly payments on that stake, but it must be repaid under the scheme terms when you sell or buy it out.
Here’s what that means in practice:
- You buy a home on the open market
- A successful application can provide up to £10,000 as a shared equity contribution.
- You own your home outright and live in it as normal
- On sale, repayment follows the scheme’s equity percentage and valuation rules, so it may exceed the original cash contribution.
- There are no monthly repayments on the government’s share
The scheme’s price limit does not establish the price of most homes in DG12 or your own eligibility. Compare available properties and discuss borrowing, savings and any amount above valuation with your advisers.
Why Annan is one of the best places in Scotland to use this fund
For an Annan search, compare the homes actually available within your budget, from town-centre flats to houses in surrounding residential streets. Dated completed sales can help inform an offer; a general price range should not be treated as a valuation for a particular road.
Let’s put the numbers into context.
A worked example for a £145,000 Annan home
The following is an illustration of your own deposit requirement, not a mortgage offer or a confirmed scheme award for a listed home:
- At a hypothetical £145,000 purchase price, a 5% deposit is £7,250.
- A 10% lender deposit would be £14,500; the lender determines the requirement.
- Budget for your own deposit, fees and any price above valuation. Do not simply subtract £10,000 from the deposit.
- LBTT payable as a first-time buyer: £0 (under the £175,000 nil-rate threshold)
The mortgage, your savings and any confirmed equity contribution must fit together under the lender’s and scheme’s rules. Have an adviser explain the complete funding plan before treating the purchase as affordable.
What about cross-border buyers from Carlisle?
If you are considering moving from Carlisle or elsewhere, compare like-for-like properties and the full cost of moving. A general claim about which town is cheaper cannot establish the value or affordability of the home you choose.
Buying in Scotland involves Home Reports and a different legal process from England. Ask a Scottish solicitor to explain the offer, valuation, missives and settlement arrangements, and budget separately for professional fees and any work identified.
Who is eligible for the First Homes Fund?
Check the detailed eligibility rules before applying, including:
- First-time buyer status is assessed under the scheme’s rules; joint applications have specific conditions.
- The home must be your main and only residence.
- Check the £300,000 property limit and the valuation rules with your adviser.
- Both eligible existing homes and eligible newly built homes can be considered.
- You need a suitable capital repayment mortgage and must meet the lender’s requirements.
The current guidance lists several participating lenders, rather than only NatWest and Lloyds. Ask a regulated adviser to check a suitable product and current participation, without assuming a lender will approve your application.
How the application process works
The process is more straightforward than many buyers expect. Here’s how it typically unfolds:
Step one: speak to a mortgage adviser.
Speak to a regulated mortgage adviser about affordability, the required deposit and whether a shared equity purchase suits you. A decision in principle is not final mortgage approval or proof of fund eligibility.
Step two: find your property.
Search for open-market properties in Annan within your budget. The team at Hunters Annan can match you with suitable homes in areas like Northgate, Annerley Road, or the town centre, depending on your needs and budget.
Step three: apply to the fund.
Apply through the scheme’s online route after an accepted offer or reservation and before concluding missives; an adviser may apply on your behalf. Your solicitor handles the legal work. Check the required evidence and application fee rather than assuming the solicitor automatically submits the application.
Step four: the missive deadline
The three-month scheme deadline runs from the award letter, not from the date an offer is accepted. A further six-month period is allowed for settlement after missives conclude. Confirm the actual dates in your award and obtain legal advice before entering a binding contract.
Step five: complete your purchase.
Once missives are concluded and funding is confirmed, you proceed to settlement and get your keys.
How the First Homes Fund compares to Open Market Shared Equity
Open Market Shared Equity is a separate Scottish Government route with its own eligibility, property limits and equity arrangements. Check its current terms rather than assuming the two schemes are interchangeable.
The key differences:
- First Homes Fund: up to £10,000, subject to eligibility and shared equity terms.
- OMSE: a separate assessment and support structure, subject to its own conditions and available funding.
Neither scheme is automatically the best for an Annan buyer. Ask advisers to compare eligibility, affordability and the long-term cost of the equity stake for your circumstances.
LBTT relief: check first-time buyer eligibility
Eligible first-time buyers pay no LBTT on the first £175,000 of the purchase price. All joint buyers must qualify for the relief. Do not assume that most DG12 buyers qualify, or that being accepted for the fund establishes the tax treatment.
Tax rules differ across the UK, so compare the actual transaction rather than describing Annan as automatically the most cost-effective option. At £145,000 the standard Scottish residential nil-rate band may already mean no ordinary LBTT, subject to the transaction and any supplement.
Ready to take your next step in Annan?
Check the current First Homes Fund guidance and funding arrangements before relying on support. Hunters Annan can help with a local property search, while a regulated mortgage adviser and solicitor should explain eligibility, borrowing and the legal process.
Here to get you there.
Book a free valuation to discuss your property’s sale or rental potential and the service options available.
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