News Politics

Tuesday 16 September 2014

Mortgage plan won't cause another bubble, says Kenny

Fionnan Sheahan, Group Political Editor

Published 15/05/2014 | 02:30

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Enda Kenny and Eamon Gilmore pictured with foreman George Browne at Abbotstown in Dublin yesterday

TAOISEACH Enda Kenny insists the Government's plan to make it easier for first-time buyers to get a mortgage is focused on helping young couples get on the property ladder.

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Mr Kenny rejected suggestions that a property bubble would be inflated by the State guaranteeing a portion of the mortgages to first-time buyers of new houses.

This scheme will allow the first-time buyers to buy their houses with smaller deposits, by giving out mortgages worth up to 95pc of the value of the home.

The proposal for a new insurance scheme is included in the Government's new construction sector plan.

Mr Kenny said the plan was aimed at getting building back to "sensible, sustainable levels" and to get jobs for unemployed workers.

He said the plan focuses on tripling housing output by 2020 and creating 60,000 jobs.

The Taoiseach said the Coalition would not allow a repeat of sub-standard building such as Priory Hall or houses with problems from pyrite.

"Nobody wants to go back to the bad old days of the construction sector and property boom," he said.

Mr Kenny said the Government wanted to see 60,000 jobs being created in the construction sector.

Fianna Fail said the mortgage insurance scheme was "nothing more than a pre-election gimmick" and that it didn't tackle the real problems faced by first-time buyers when trying to purchase a home.

But Mr Kenny hit back at Fianna Fail's claim that it would fuel a property bubble.

"Fianna Fail have a cheek of outrageous proportions talking about the construction industry and this Government – they destroyed this country, everybody knows it," Mr Kenny said.

"The hallmark of the previous government was Priory Hall.

"We are not going back to credit being thrown around like confetti and trying to run a country on the unsustainable taxes that came from that."

Called 'Construction 2020', the document contains 75 action points to be implemented over the next year.

The building industry welcomed the plan but Construction Industry Federation director general Tom Parlon wants a specific minister in charge of the sector.

Mr Parlon said a minister for construction and infrastructure would be in charge of as important a sector of the economy as the Agriculture Minister is.

"You need to have a single point of contact and responsibility," he said.

Mr Parlon also said that a cut in the VAT rate would stimulate the industry.

Irish Independent

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