Friday 24 November 2017

Government to axe help-to-buy scheme for first time buyers

Eoghan Murphy. Photo: Tom Burke
Eoghan Murphy. Photo: Tom Burke
Philip Ryan

Philip Ryan

The Government is set to axe the grant for first-time buyers introduced in last year's budget. The 'help-to-buy' scheme, which netted first-time buyers up to €20,000, was the cornerstone of former Housing Minister Simon Coveney's strategy to alleviate Ireland's housing crisis.

However, new Housing Minister Eoghan Murphy is understood to be actively considering doing away with the grant.

The new minister favours introducing measures aimed at directly increasing supply rather than policies that encourage people to buy when there is a shortage of houses on the market.

A senior Government source said that "direct measures" are needed - "rather than increasing demand to increase supply" which was the aim of the help-to-buy scheme.

During the Fine Gael leadership campaign, Leo Varadkar pointedly said he intended to review the scheme should he become the new party leader.

"The market is still dysfunctional and we won't solve this without meaningful Government intervention, it is going to require both private and public resources and initiatives," a senior source said.

It is understood the Department of Finance was never fully behind the proposal and the uptake of the scheme has been relatively poor.

It also emerged recently that the grant was fuelling a surge in house prices - at a time when home-buyers were already struggling to get on the property ladder.

Nevertheless, scrapping the scheme will be huge blow for Simon Coveney - who put a lot of political capital into the policy and fought hard within his own party and with Fianna Fail to get it over the line.

Sunday Independent

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