Dáil Éireann Debate, Tuesday - 26 July 2022
662. Deputy Michael Creed asked the Minister for Housing, Local Government and Heritage the range of supports available for first-time buyers of affordable homes, particularly single persons whose sole income leaves them disadvantaged in terms of their level of mortgage approval; the assistance his Department is offering in respect of this cohort who may be interested in purchasing homes; and if he will make a statement on the matter. [40189/22]
Amharc ar fhreagraThe Housing for All strategy commits to the delivery of 36,000 new Affordable Purchase homes and 18,000 new Cost Rental homes by 2030. Both of the two new Affordable Purchase schemes (the Local Authority Affordable Purchase Scheme, and the First Home Scheme) will support households of all sizes that, because of current income levels, are unable to secure a mortgage to meet the cost of purchasing a newly constructed home.
The Local Authority Affordable Purchase Scheme assists first-time buyers purchasing Local Authority-delivered homes by bridging the gap between the market value of the home and the combined value of the buyer's mortgage and deposit. Homes made available through this scheme will be advertised on the relevant Local Authority’s website in advance of their sale, and will include information on eligibility requirements, including household income limits. Subject to a set minimum price, buyers will generally pay a price for these homes according to their mortgage-funded purchasing capacity, with the difference between this price and the market value held as an equity stake of up to 40% by the Local Authority.
Recent examples of Affordable Purchase delivery under this scheme are:
- South Dublin County Council is making 16 three-bed homes available at Kilcarbery Grange at prices from €245,600.
- Cork City Council will soon deliver homes in Boherboy at initial prices from €218,000 for a 2-bedroom and €243,000 for a 3-bedroom dwelling.
- Fingal County Council will shortly deliver 2-bed apartments at an indicated price of €166,000, with 3-bed dwellings being made available for between €206,000 and €258,000, some 20% below market norms.
The new First Home Scheme, launched on 7 July 2022, employs an equity share model in a similar way to the Local Authority-led scheme, though it applies to homes purchased through the private market. The First Home Scheme has total committed funding of €400m and a target of supporting 8,000 home purchases over four years. Full details are available at www.firsthomescheme.ie.
Another option for a single person may be the Local Authority Home Loan, which the Housing for All strategy introduced as successor to the Rebuilding Ireland Home Loan. The new Local Authority Home Loan launched on 4 January 2022 and has a lower interest rate and higher income eligibility than previously applied. The Local Authority Home Loan supports first-time buyers purchasing new or second-hand homes, as well as funding self-builds. More details on the Local Authority Home Loan scheme are available at: localauthorityhomeloan.ie/
In addition, the new Croí Cónaithe (Towns) Fund was launched on 14 July 2022 and makes grants of up to €30,000 for the refurbishment of vacant properties in towns and villages across Ireland for occupation as a principal private residence. This includes the conversion of properties which have not previously been used as residences. Where the refurbishment costs are expected to exceed the standard grant, additional funding of up to €20,000 may be available when the property is confirmed to be derelict. Full details of the scheme, including the application form, are available at:
www.gov.ie/en/publication/c2183-croi-conaithe-towns-fund/#application-form
In addition to the above schemes, Revenue's Help To Buy tax rebate supports first-time buyers in meeting the mortgage deposit requirement for newly-built houses or apartments, as well as self-build homes. Subject to the level of income tax and DIRT paid by the applicant over the previous 4 years, Help To Buy can provide a tax rebate to first-time buyers of up to 10% of the price of the new home, capped at €30,000. Full details of the incentive are available at: www.revenue.ie/en/property/help-to-buy-incentive/index.aspx
Matters pertaining to mortgage lending limits, including deposit requirements, come under the remit of the Central Bank of Ireland, which is an independent body. However, it should be noted that lenders are permitted to make certain limited exemptions to the standard rules for first-time buyers, which may assist single applicants: 20% of mortgages can be above the standard cap of 3.5x annual income, while 5% of mortgages can be for more than the standard lending limit of 90% of the purchase price. Relevant information is available on the Central Bank website at:
www.centralbank.ie/consumer-hub/explainers/what-are-the-mortgage-measures
www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/mortgage-measures
