Giving to those who already have
Why is the Scottish Government creating a housing subsidy it knows will mostly go to the wrong people? In Common this week argues strongly against another help to buy scheme.
There’s a particular kind of political nerve required to revive a policy while your own department is sitting on the evidence that it didn't work the first time. That, in effect, is what the Scottish Government has just done with the First Homes Fund.
The pitch in May was a usual pre-election offer - £10,000 of public money towards a deposit on a new house for first-time buyers, no interest, no monthly repayments, just an equity stake for the taxpayer that gets recouped when the home is sold.
Critics called it something closer to a distraction. Common Weal warned it tackles the wrong end of the affordability problem, opposition MSPs said it risked making things worse, not better, and the broad shape of the objection was the one economists have been making about Help to Buy style schemes for a decade: if you subsidise purchasing power in a market where the supply of homes is essentially fixed, all you do is allow sellers to increase their sale price, making the housing crisis worse.
Scotland ran this exact scheme, under this exact name, from 2019 to 2021. Over 10,000 households used it. And the Scottish Government paid for a proper quantitative evaluation of it, published in February 2021, which asked the one question that actually matters; did people need this money, or would they have bought a home anyway?
Buried in that evaluation is Chart 9.6, and it is about as close to a smoking gun as policy evidence gets. Evaluators asked First Home Fund buyers a cascading counterfactual; could you have bought the same property without the fund? If not, a different one in the same area? Still no? A different area, then? And if even that's a no, what about something smaller, or needing more work?
“Ministers are entitled to relaunch a popular scheme, but popularity and effectiveness are not the same thing”
The results should have been front and centre of the 2026 announcement, not left in an old PDF. Around 70% disagreed that ‘I could have bought the same house without help’, meaning that 30% of buyers could have bought the exact same house without the public funding they received.
Well over half (58.2%) thought they could still have managed to buy something in the same area. If you extend the search to a different area entirely, another 42.6% believed they would have got there. It was only once you lowered the bar all the way to ‘smaller, or needs work’ that the number of buyers who genuinely believed they were shut out without the fund fell to 28.2%.
On the government's own survey, of its own scheme, nearly three out of four recipients would have bought a home regardless of the fund. That's the textbook definition of public money being handed to people who don't need it to get the outcome they were going to get anyway while others in need get nothing.
The same evaluation found the fund was quietly cannibalising the government's other housing schemes; around 37.5% of new build purchases made through the First Home Fund could have gone through Help to Buy (Scotland) instead, and 11.7% could have used Open Market Shared Equity. This wasn't new money reaching new people, a chunk of it was one taxpayer funded pot substituting for another.
FHF beneficiaries had household incomes essentially identical to the average unsupported first time buyer in Scotland, and 68% earned more than the median Scottish household. This is a scheme for comfortably placed young professionals who would have got a mortgage regardless, not a lifeline for people locked out of the market.
Ministers are entitled to relaunch a popular scheme, but popularity and effectiveness are not the same thing, and the government has known the difference since 2021. And when Common Weal asked (via Freedom of Information request) what impact assessment had been made in bringing this policy back, what we got was mostly redactions and exemptions.
The last thing young people need is more unevidenced policy-making that is likely to make the problem worse. We need more houses at lower cost to be available, particularly for our younger generation. Incomes have to support people to be able to live in the places people actually want to live.
Nothing in either version of the First Home Fund helps with that. Recycling a scheme whose own evaluation flagged serious concerns about wasted money and ineffective outcomes does not make sense. The sequel rarely fixes what was wrong with the original.
