14th August 2026
The Scottish Government has a simple and attractive message for first-time buyers: we will help you buy your first home.
The newly launched First Homes Fund can provide up to £10,000 towards the purchase of a property worth up to £300,000. The Scottish Government takes an equity stake in the property rather than charging interest or monthly payments. It expects around 50,000 households to benefit from the £500 million programme over the course of the current Parliament.
For someone struggling to assemble a deposit, that sounds like welcome news.
But there is another question that deserves to be asked.
Does giving people more money to buy houses actually make houses more affordable?
Or does it simply allow more people to bid for the houses that already exist?
The fundamental problem is supply
Housing affordability ultimately comes down to a fairly basic economic relationship.
If there are too few houses for the number of people wanting them, prices tend to remain high.
Give buyers additional purchasing power without substantially increasing the supply of homes and there is a danger that at least part of the subsidy will eventually be reflected in higher prices.
That doesn't mean every pound of government assistance automatically goes straight into the pockets of sellers.
Housing markets are much more complicated than that.
But the underlying question is unavoidable:
If Scotland needs more affordable homes, why is so much attention being given to helping people buy the existing stock rather than dramatically increasing the supply of homes?
The timing is curious
The latest Scottish Government housing figures make the question even more interesting.
In the year to March 2026, Scotland completed 17,268 new-build homes — 10% fewer than the previous year.
Private-sector completions fell from 14,711 to 13,494, while social-sector completions fell from 4,471 to 3,774.
New-build starts also fell, reaching 14,955, down 4.4% year-on-year.
So Scotland is introducing a major programme designed to help people purchase homes at a time when the number of new homes being built is actually falling.
That seems to me to deserve some serious examination.
Helping people buy isn't the same as making homes affordable
Imagine two young couples competing for the same house.
Neither can quite afford it.
The Government gives one or both of them £10,000.
They can now make a higher offer.
But the house hasn't changed.
There is still only one house.
If more buyers receive assistance, the fundamental shortage remains.
This is why there is a difference between housing policy and homeownership policy.
The First Homes Fund is very clearly a homeownership policy.
It is designed to help people become homeowners.
But Scotland's bigger problem is arguably a housing supply problem.
The Government's argument
There is a perfectly respectable case for the scheme.
The Scottish Government says the fund is part of a broader programme that includes £4.9 billion of investment in affordable housing over four years. It also argues that helping first-time buyers can stimulate activity in the housing market and support the wider construction sector.
And there is a very real human argument.
A young person who has a secure income but cannot quite assemble the necessary deposit could potentially become a homeowner because of the scheme.
For that individual, the £10,000 isn't theoretical.
It could change their life.
That shouldn't be dismissed.
But what happens to the price?
This is where the Government needs to answer a harder question.
How much of the £500 million will ultimately improve affordability, and how much will simply increase purchasing power?
The distinction matters.
Suppose someone can afford a £190,000 house but receives government assistance that enables them to compete for a £200,000 house.
The individual has gained.
But if thousands of buyers receive similar assistance, sellers know that buyers have additional purchasing power.
Over time, some of that additional money can be absorbed into property prices.
The Government may therefore help some people cross the threshold into homeownership without necessarily making the underlying housing market much cheaper.
Why building is harder
There is an obvious reason politicians like buyer assistance.
A fund can be announced.
Applications can open.
People can receive money.
The political message is immediate:
"We are helping first-time buyers."
Building tens of thousands of additional houses is very different.
It requires land, planning permission, infrastructure, construction capacity, finance and often years of work.
And when developments are proposed, local communities can object, councils can struggle with infrastructure costs and developers can face rising construction costs.
Building houses is a much slower and more complicated political proposition.
But it addresses the supply problem.
Scotland needs to ask what it actually wants
There are really two different objectives.
The first is:
"How do we get more people into home ownership?"
The First Homes Fund can help with that.
The second is:
"How do we make housing more affordable?"
That requires a much bigger answer.
It means increasing supply.
It means building more social housing.
It means making better use of existing buildings.
It means tackling empty homes.
It means ensuring that planning systems allow appropriate development.
And in rural Scotland it means recognising that a house being physically present does not necessarily mean it is available to a local family at a price they can afford.
The rural Scotland problem
This is particularly important in places such as the Highlands and islands.
The housing market isn't simply about national averages.
A community can have houses that are expensive because of limited supply, second-home demand, tourism pressures, construction costs and the difficulty of getting new developments built.
A £10,000 contribution might help one local buyer.
But it doesn't create another house.
And that is the fundamental issue.
One subsidy helps one buyer.
One new house creates another opportunity.
Multiply that difference across thousands of households and the policy choices become much more significant.
Is this really a solution?
We cannot argue that the First Homes Fund is a bad policy.
That would be too simplistic.
For people who benefit from it, it could be extremely valuable.
The question is whether it should be presented as a solution to Scotland's housing affordability problem.
It isn't.
It is a way of helping some people cope with the housing market as it currently exists.
And those are two very different things.
The Scottish Government is effectively saying:
"Here is £10,000 to help you buy."
Perhaps the harder question is:
"Why can't we build enough homes that people don't need £10,000 of government assistance to buy one?"
That is the debate Scotland really needs to have.
Because if the Government continually increases the amount of money available to buyers without increasing the number of homes available to buy, there is a danger that taxpayers end up helping finance the very house-price inflation that makes government assistance necessary in the first place.
The real test of Scotland's housing policy shouldn't be how many people receive a grant.
It should be whether, five or ten years from now, ordinary working people actually need as much government assistance to buy an ordinary home.
That is the difference between helping people into the market and fixing the market itself.
Are the Scottish Government merely propping up house prices and making it more expensive for he next group of young people who will still not be able to afford a deposit. Can we go on making these type of offers if we do not build enough houses.