Industry & Business

Continuation of Help-to-Buy Scheme in Budget 2020 Welcomed

Continuation of Help-to-Buy Scheme in Budget 2020 Welcomed

Continuation of Help-to-Buy Scheme in Budget 2020 Welcomed
October 09
14:40 2019

The continuation of the Help-to-Buy Scheme in the 2020 Budget has been welcomed by Property Industry Ireland, Brokers Ireland, EY Ireland and the Institute of Professional Auctioneers & Valuers.

Reacting to Budget 2020, Dr David Duffy, Director of Property Industry Ireland (PII), the Ibec group for businesses working in the property sector, commented: “The focus of Budget 2020 on Brexit proofing is welcome. However, the housing crisis remains a key issue for the domestic economy. The extension of the Help-to-Buy scheme for first-time buyers is positive, but a two year extension is short given the length of the residential development cycle. The Help-to-Buy initiative has provided certainty of demand that has led directly to an increase in the supply of new housing. This extension should have been announced much earlier in the year. Delaying the announcement to continue the Help-to-Buy scheme has resulted in uncertainty for home-builders and means that less homes will be built in 2019 and 2020 than otherwise would have been the case.

Dr David Duffy, Director of Property Industry Ireland (PII).

“Supply is needed across all tenures. Residential rents are at an all-time high. Budget 2020 missed another opportunity to announce measures to stem the flow of small-scale landlords from the market. A key issue in the provision of housing is the availability of serviced land. PII welcome the allocation of €186 million to the Serviced Site Fund and Local Infrastructure Housing Activation Fund in 2020.”

Responding to the Budget measures Brokers Ireland has welcomed the retention of the Help-to-Buy scheme for a further two years. Rachel McGovern, Director, Financial Services at the organisation which represents 1,250 Broker firms, said: “The scheme has become a lifeline enabling first-time buyers acquire a home in a very difficult market where rental levels exceed mortgage repayments, dramatically so in most areas.”

Brokers Ireland had called for the scheme to be extended to include second hand homes. The Help-to-Buy scheme gives first-time buyers a 5pc income tax rebate up to a maximum of €20,000, on the purchase on a new home valued at up to €500,000. Self-build properties are also eligible.

Annette Hughes, Director, EY-DKM Economic Advisory Services.

Annette Hughes, Director, EY-DKM Economic Advisory Services, said: “The retention of the Help to Buy (HTB) scheme for another two years will provide much-needed certainty to buyers and builders. It is three years since the Help to Buy Scheme was introduced and to date there have been 14,722 claims by first-time buyers totalling €217 million. With 55% of claims for properties priced above €300,000 and given average property prices of €302,000 in July 2019, the decision not to lower the threshold at this point in time is welcomed. With one-third of HTB claims to date in Dublin and 70% in the Greater Dublin Area, the retention of the scheme in its current format will alleviate current affordability constraints for buyers in the main urban locations.”

IPAV, the Institute of Professional Auctioneers & Valuers, which called in its pre-Budget submission for the Help-to-Buy scheme to be extended for a further two years has welcomed the decision of the Minister for Finance to do so, saying the scheme is central to giving confidence to a market that it is “extraordinarily difficult for first-time buyers and for smaller builders/developers, as opposed to the few dominant strongly capital backed players.”

Rachel McGovern, Director of Financial Services at Brokers Ireland.

Pat Davitt, IPAV Chief Executive, said the Help-to-Buy scheme is a crucial intervention in the market, enabling people to acquire a first home in a very difficult market. “We very much welcome the fact that the Minister has listened. Young people are severely disadvantaged in the current market. At a time when they are but starting in their careers large numbers of them are paying rents at levels way beyond the price of servicing a mortgage and are trying to save for a mortgage deposit at the same time, an impossible task for many.”

According to IPAV, of the 30,875 applications for the Help-to-Buy scheme to the end of July the vast majority are purchasing homes in the €226,000 to €375,000 price brackets, largely in urban areas, with loan-to-value levels of 85pc and over.

Pat Davitt said however, it is a pity the scheme was not extended to second-hand homes. “Such would have created greater movement in the market, benefitting new and existing home owners, and would have had a knock-on effect in freeing up more homes for rental.”

About Author

mike

mike

Related Articles

New Subscriber

[contact-form-7 id=”65829″ title=”Subscriber”]

Advertisements





















National Manufacturing Conference & Exhibition 2018

NIBRT Springboard Success Stories



Upcoming Events

[eventlist]