THE GOVERNMENT has defended plans to extend a scheme that helps first-time buyers, acknowledging that there is a risk that prices may increase.
The First Home scheme is set to be extended to self-builds properties, with Minister Darragh O’Brien fulfilling a commitment he made last year at the Fianna Fáil Ard Fheis.
The scheme to date has been open to people buying new-build houses and apartments and to renters whose landlords are selling the property in which they live.
It is now being extended to include people who are building their own home, with financial support available for up to 30% of the total cost of the build.
The scheme works by closing the gap between a buyer’s mortgage approval amount and deposit and the cost of a property.
A self-build home is considered to be one that is built on a site by its owner(s), either through direct labour or a fixed contractor, and it must be used as their principal private residence.
Specific maximum costs to be eligible for the scheme are set on a local authority basis.
The Irish Independent reported yesterday that the minister was also considering extending the First Home and Help to Buy schemes to lenders seeking to buy second-hand homes.
However, the move was critiqued by housing expert Rory Hearne and Sinn Féin’s spokesperson for housing Eoin Ó’Broin, who expressed concerns about the potential impact on property prices.
Hearne told RTÉ Radio One’s Today with Claire Byrne yesterday that more research and analysis would need to be provided by the minister on the potential impact that the extension of the scheme may have to the prices of existing homes.
In a statement, Ó’Broin said extending the scheme to second-hand homes would be a “serious mistake” as it would push up prices, accusing the government of “fanning the flames” of house price inflation.
Speaking to reporters on the side of a UN summit in New York, the Taoiseach said that impacts on price is “always a factor we should take into account”.
“We want to help first-time buyers,” Leo Varadkar said.
“We want to give them a bit of an advantage over, say, commercial buyers or landlords buying or even people moving home, but there is a risk that anything you do on the demand side increases price on the supply side.”
First Home scheme
On the move to include self-builds under the scheme, Minister for Housing Darragh O’Brien said it was a “particularly important development” for people who living in more rural locations or who “come from a farming background and who have a site but not the full level of finance they need to build their new home”.
“We designed this scheme to be flexible and to evolve so that it can help as many people as possible,” the minister said in a statement.
“We previously extended it to help renters looking to buy their home from their landlord and now it’s the turn of self-builders.”
- With reporting by Christina Finn in New York
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