This marks a 20% decrease in the value of loans provided to first-time buyers, as numbers have plummeted 13% from 8,350 to 7,210 within six months.

Data from UK Finance disclosed the value of lending for first home purchases dropped from £4.874 billion to £4.018bn from June 2021 to June 2023.

The current housing scenario has sparked concerns among housing and anti-poverty campaigners after it was revealed last week that social landlords in Scotland are projecting a 15% reduction in new home builds over the next five years due to spending cuts.

The dwindling numbers in new social sector housing building starts have hit a seven-year low, slated at 3,665 in 2023, highlighting potential failures to meet the Scottish Government’s targets on affordable homes provision.

The Bank of England’s decision to hold interest rates at 5.25% offered a respite to mortgage holders and prospective homeowners. However, with 14 consecutive rate raises prior, the cost of borrowing has skyrocketed from a base rate of 0.1% in December 2021. This continual increase has intensified the challenges first-time buyers face, causing a surge in tenants grappling with escalating rents and the prospect of lifelong private renting.

While the average price of a first home stands at £188,242, with deposits averaging £38,871, first-time buyers in Scotland are still experiencing affordability in comparison to the rest of the UK.

Graham Blair, from the Bank of Scotland, acknowledged Scotland’s relative affordability but highlighted the persistent challenges first-time buyers confront, despite lenders being readily available to assist.

He told The Herald: “While lenders are ready to help – we provided around £5.5bn in lending to first-time buyers in the first half of this year – it doesn’t change the fact that those buying their first property continue to face challenges.”