First Home Fund - quantitative and qualitative analysis: evaluation synthesis

Appendix

Research Questions

The research reports aim to address the following questions:

Quantitative Research

• What are the characteristics of buyers using the FHF?
• What type of properties are being purchased through the FHF?
• How have properties purchased through the FHF been funded?
• Are first-time buyers satisfied with the property they have purchased and the area they will be living in?
• To what extent has the FHF enabled first-time buyers to enter the housing market that otherwise would have been unable to do so?

Qualitative research

• What are stakeholders' experiences and views about the FHF?
• Why are buyers using the FHF?
• What are the barriers, if any, to using the FHF for purchasing a home?
• What effect, if any, has the £550 application fee had on applications?
• What effect, if any, has the FHF had on stakeholders' business?
• In what way, if any, has the FHF affected the other shared equity schemes?

Data and Methodology

If a buyer wishes to use the FHF to purchase a property, they must complete an application form after they have had their offer on a property accepted. The application form contains a range of information pertinent to the applicant and the property the applicant is purchasing. This application form is reviewed by Link, who will either approve or decline the application.

If an application is approved by Link, the applicant will be invited to complete a questionnaire called the "sales log form". This is optional to complete. The sales log form contains questions that elicit more information about who is using the FHF, what type of property they are purchasing and why they are using the FHF.

For this evaluation, the Scottish Government received application and sales log form data from Link that was extracted from their database on 1 December 2020. This data consists of all FHF applications made that have settled, or where the application has been approved but not yet settled (as of 1 December 2020). It covers the entire duration of the FHF being open to applications (i.e. from 18 December 2019 to 2 October 2020). If an application has been denied, or the applicant withdrew at any point up to 1 December 2020, they are not included in this data.

The key stakeholder groups for the qualitative evaluation were: those who have applied to FHF, including those who have gone on to complete a home purchase using FHF; those who applied but have not completed a home purchase using FHF; independent financial advisors, with a particular focus on those providing mortgage-related advice to first-time buyers; lenders that offer a mortgage product to buyers using FHF; and housing developers and Homes for Scotland (a membership-based representative body for the home-building industry).

Qualitative interviews were conducted with five lenders (spanning UK-wide banks and building societies, and local credit unions) including a lender who has ceased lending under the FHF. Eight interviews were carried out with independent financial advisors. Three of the interviewees worked for the same company but covered different areas of Scotland or different types of sale (new build or resale). The other interviews included those working for larger companies through to a sole trader and covered a range of urban and rural locations. Six interviews were carried out with the home-building industry, with five developers and Homes for Scotland participating. Each of the five developers is also involved with the Scottish Government's Help to Buy scheme.

A purposive sampling approach was used to recruit applicant study participants who were either buyers or non-buyers. Someone was considered to be a buyer if they had completed the purchase of a home with support from FHF at the point the samples were drawn (the first sample was drawn in October 2020 with a second sample drawn in November 2020).

A non-buyer was someone who had either not completed their purchase at the point the sample was drawn, but who might still be going ahead with a purchase using the FHF, or who had applied but for some reason had not gone on to use the FHF.

A cross-section of buyers and non-buyers was drawn, taking into account wider applicant demographics. From this cross-section a total of 55 interviews were carried out: 39 of these interviewees were classified as being buyers and 16 as non-buyers, according to the dataset from which the sample was drawn.