First Home, a new scheme set up to make it easier for First-Time Buyers to afford a new build home as part of the Government’s Housing for All strategy, has been launched this week.
The €400 million affordable purchase scheme, designed in conjunction with mortgage providers and Banking and Payments Federation Ireland (BPFI), aims to bridge an existing affordability gap by providing buyers with part of the purchase price for their home, in return for the Scheme taking a minority equity stake.
The scheme is available initially to First-Time Buyers and other qualifying homebuyers who are taking out mortgages from AIB (including its EBS and Haven Mortgages businesses), Bank of Ireland or Permanent TSB. Other mortgage providers may join the scheme in the coming months. It is open to buyers of newly-built houses and apartments in private developments.
It will provide financial support to borrowers and facilitate them in purchasing a new home that they could not otherwise do after combining their available mortgage and deposit. The Government is making €400 million available, to facilitate the purchase of up to 8,000 homes over a 5-year period, subject to demand.
Speaking yesterday, Minister for Housing, Local Government and Heritage, Darragh O’Brien said, "This scheme we are launching today will support First-Time Buyers and those seeking a fresh start by helping to bridge the gap between what they can afford and the price of the home they wish to purchase. It will make new homes more affordable and easier to access for First-Time Buyers, helping them get their foot on that crucial first rung of the property ladder. It will encourage the increased development of new build homes."
The move has been welcomed by Property Industry Ireland (PII), the Ibec group that represents the property and construction industry. Speaking today, Chairperson of Property Industry Ireland, Ivan Gaine said, "By bridging the affordability gap, the scheme will underpin the viability of more housing developments and will result in additional supply of new homes. As we have seen in the preliminary Census numbers, the supply-demand imbalance is larger than previously calculated, and we look forward to an increased pace on the initiatives proposed within Housing for All and continuing collaboration with Government and all stakeholders."
However, Goodbody Stockbrokers has warned that the policy does little to address the blockages to supply currently in the system in terms of land availability, service infrastructure, planning, viability and costs. In a report, Goodbody noted that while the policy further reinforces the view that there is significant levels of housing demand, more needs to be done to address the question of the high cost of building in Ireland.