Plan to help first-time buyers
Published 22/01/2013 | 14:00
A new scheme to encourage first-time home-buying in Northern Ireland has been announced.
It will require purchasers to take a starter share of up to three-quarters in the property, using a loan, with a deposit worth a minimum of 3% of the sale price, finance minister Sammy Wilson said.
Participants will initially pay a very low rent on the remaining quarter-share still owned by the Government, with the rate increasing after five years to encourage them to become full owners.
Mr Wilson said: "The new shared equity scheme would also assist first-time buyers in getting on the property ladder in what continues to be a very challenging environment."
It is a variation on the existing Co-ownership scheme. A separate initiative will allow housing associations to purchase vacant or repossessed homes to fix up and sell on the market at a discount. The finance minister added: "These schemes should provide a much-needed boost for our local housing market and construction sector."
The slump in the Northern Ireland housing market has made houses much more affordable to first-time buyers, experts have said, but lenders have tightened their loan criteria. The National Association of Estate Agents reported last year that the proportion of sales made to first-time buyers dropped at one point to 17%, well below the "healthy" long-term 40% average.
The Council of Mortgage Lenders has suggested a more positive forecast. The Executive pump-priming money was made available in the January monitoring round, a mechanism used by the finance minister to redistribute spending between departments during a financial year.
EU funding worth £18 million earmarked for the Titanic visitor centre which opened last year will not now be available to the Department for Enterprise, Trade and Investment following a query from the European Commission about the project. The Executive is considering taking up that shortfall and making the EU money available to another Executive department rather than risk it being lost to Northern Ireland.
Mr Wilson said: "The Executive is still considering the complex circumstances surrounding this bid and a decision on whether to agree this allocation has therefore not yet been taken." He said that would bring Executive overspending to £26 million by the end of this financial year in April.
"However, this would still be acceptable in the context of the level of underspends likely to emerge (from other departments) at the end of the financial year," he added.