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Dublin property price ceilings under First Home Scheme to increase to €475,000

Maximum property price ceilings are to increase from 1 January.

MAXIMUM PROPERTY PRICE ceilings under the First Home Scheme for every county are to increase, with Housing Minister Darragh O’Brien expected to make the announcement later this week.

The scheme, one of the key pillars in the Government’s Housing for All plan, aims to help people to secure a home by providing part of the purchase price of the dwelling in return for a minority equity stake.

It was launched during the summer and aims to help first-time buyers afford newly built homes.

Under the new changes, price caps for houses in counties such as Dublin City, Cork City; Dún Laoghaire-Rathdown, Fingal, South Dublin are to increase by €25,000 from €450,000 to €475,000. 

Other counties such as Galway County, Kilkenny County, Meath County, Westmeath County, Louth, Limerick City and County will see price caps rise for houses from €350,000 to €375,000 for all properties.

Price caps in Cork County, Galway City, and Kildare are to rise to €425,000. Laois price ceiling for a house will rise to €350,000, there is no change for Waterford City and County which stays at the €350,000 mark.

All remaining counties the maximum price cap rises to €325,000.

As reported by The Journal last week, the minister is understood to have received and approved of a recommendation from the First Home Scheme board, based on a report looking at the median house prices across the country.

That report said that every new house valued at €325,000 or less should be eligible for the scheme irrespective of its location.

The scheme is open to first-time buyers of newly built houses and apartments in private developments anywhere in Ireland.

The maximum stake the scheme will take is 20%, if the buyer is also availing of the Government’s separate Help-to-Buy scheme, and 30% if Help-to-Buy is not used.

The equity stake is free for the first five years followed by a cheap interest rate thereafter. The equity share and all outstanding service charges can be repaid in full on the sale of the property. 

The €400 million scheme aims to facilitate the purchase of up to 8,000 homes over a five-year period.

Mortgage lending rules

Maximum property price ceilings at which a first-time buyer can purchase a home are set for each local authority, but under the new change, the price caps for each county will increase from 1 January. 

These changes are set to kick in alongside the changes to the mortgage lending rules announced by the Central Bank recently, which allows a person or couple borrow four times their gross salary. 

It is understood that since applications opened, concerns have been raised that a number of new housing developments in some counties have been priced out of reach of the First Home Scheme.

Since the launch of the scheme in July, 2,400 people have registered, with 750 approvals.

Over the Christmas period, it is understood that a publicity campaign is to be rolled out by the Department of Housing to promote the scheme and the changes kicking in in the new year. 

The scheme is a joint venture between the State and three banks, currently AIB, BOI and PTSB.

The last quarterly report into the scheme showed that 66% of certs issued have been for buyers in Dublin, Kildare, Meath and Wicklow, with the remaining 34% spread across 19 counties throughout Ireland.

Up to September 2022, the median price for a first-time buyer has increased from €349,000 to €360,000.

Sinn Féin spokesperson on housing, Eoin Ó Broin described the shared equity loan scheme as a pro-developer scam, warning that it will only push up house prices and saddle working people with ever greater levels of debt.

However, Government sources deny that the scheme has had such an impact and that the changes due to be announced this week are not about chasing house prices, but keeping the scheme up to date.

They added that there is little point of having a scheme whereby first time buyers are not able to access it.

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