Dáil Éireann Debate, Thursday - 8 September 2022
511. Deputy Réada Cronin asked the Minister for Housing, Local Government and Heritage if, given the high prices of regular family homes and the lack of such properties, the new first-time-buyers scheme will be extended in bands to address the high threshold prices and in scope to also include second-hand homes; and if he will make a statement on the matter. [41955/22]
Amharc ar fhreagraThe new First Home Scheme, launched on 7 July 2022, supports first-time buyers in purchasing new build houses and apartments in the private market through the use of an equity share model. The Scheme uses regional price ceilings based primarily on the median prices of new-build homes purchased by first-time buyers. This is to temper any inflationary pressures, to target support at purchases in the lower part of the price distribution in each area, and to encourage additional new build housing supply at this price level. All price ceilings for the First Home Scheme are available on the scheme website, www.firsthomescheme.ie.
The setting of the initial First Home Scheme price ceilings has been informed primarily by an analysis of official published data from the Central Statistics Office, specifically the Residential Property Price Index (RPPI), together with a review of current market data and sales prices for new homes marketed at first-time buyers. Any system of geographically-based price ceilings will require defined borders, and in the case of the monthly RPPI reports the most robust and informative data is broken down at the local authority level. When considered overall, the system will broadly reflect price trends and represent a clear, easily understandable method for setting price ceilings.
The First Home Scheme Ireland Designated Activity Company now holds responsibility for maintaining, reviewing, and updating the price ceilings. The scheme has confirmed that a review of ceilings will be undertaken after six months of operation and periodically thereafter, which will ensure that the ceilings allow the scheme to deliver on its underlying objectives.
By supporting the purchase of new homes, the First Home Scheme is focused on contributing to the increase of housing supply in general, and of suitable homes for first-time buyers in particular, by building confidence in realisable demand even in the context of increasing development costs. It is only by an increase in the number of new homes that the current under-supply in the market can be addressed.
Separately, to support affordability, the Help to Buy scheme is available to First Time Buyers on new properties and currently provides up to €30,000 or a max of 10% of the purchase value of a new home.
One option already available to support the purchase of second-hand homes is the Local Authority Home Loan. This was introduced under Housing for All as a 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/.
