Monday 16 October 2017

The clue is in the title - a housing boom needs housing

Help-to-buy may prompt first-time buyers to action - but they may be unable to take advantage of it, writes Ronan Lyons

Given the country needs roughly 4,000 new homes every month, it is hard to see how a “housing boom” could take place without the housing. Stock picture
Given the country needs roughly 4,000 new homes every month, it is hard to see how a “housing boom” could take place without the housing. Stock picture

Ronan Lyons

There has been much talk this past week - following Minister Eoghan Murphy's comments about help-to-buy - that July will be a bumper month for the housing market. In particular, the new minister talked about help-to-buy being reviewed and potentially scrapped if it is found that the scheme is pushing up house prices.

The scheme lowers the minimum deposit required by first-time buyers of newly built property. Therefore, some agents believe that first-time buyers will move now, rather than wait and gamble on it still being there in six months.

Certainly, if it were to be wound down, it would be an ignominious end to the scheme first mooted less than a year ago and only in existence since the start of the year. And there is precedent for this kind of boost. The end of mortgage interest relief and the imminent introduction of Central Bank rules both had this kind of effect on the market. Mortgage interest relief was ended in December 2012 and, with this well flagged, there were more than 9,000 transactions in the housing market in the final three months of 2012, compared with fewer than 5,000 in the first three months of 2013.

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