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BoI announces €1.5bn fund for first-time buyers

THE property market got a further boost yesterday when Bank of Ireland (BoI) said it was creating a special mortgage fund that could help fund the purchase of around 10,000 first-time buyer homes.

It comes after analysts welcomed Tuesday's Budget moves to boost the amount of mortgage tax relief for new buyers who take out a home loan next year.

Bank of Ireland said it would make €1.5bn available to customers buying their first home or moving home next year through the new fund.

With the average price of a property now around €170,000, and assuming a 20pc deposit, this would mean the fund could finance up to 10,000 new buyer purchases.

Analysts said mortgage lending was at its lowest level since records began, with just 3,600 mortgages issued during the three summer months.

Tuesday's Budget means mortgage interest relief will be increased to 30pc for first-time buyers who took out their first mortgage between 2004 and 2008.

First-time buyers who purchase a home in 2012 will be entitled to claim mortgage interest relief of 25pc.

Karl Goggin of NCB Stockbrokers said Mr Noonan's mortgage plans would help ease the high level of arrears and assist increased lending volumes.

Vice president of the Society of Chartered Surveyors Ireland Roland O'Connell said access to mortgage finance was the key issue.

"We hope that the bank lending targets will be reached to assist qualified buyers and investors in accessing credit which will create transactions in the market and tax revenue for the exchequer," he said.

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