The help to buy scheme is set to be extended past the original deadline of the end of this year. The help to buy scheme grants money to first time buyers to help and encourage them to purchase their first homes. Currently, the grant gives up to 20 million Euros, but the government Finance Minister Paschal Donohoe signaled strongly that this program will be extended.
Mr. Donohoe said that the grant had, “a very valuable role in supporting the purchase of homes across last year and this year in particular.” The rising house prices in Ireland has caused many young buyers unable to attain mortgages to buy a house and this initiative mainly targets younger couples.
Some complaints with having a help to buy scheme is many people view it as being a subsidy to developers. The payment that the government is giving to buyers is subsequently being paid to the developers. This can encourage them to keep prices raised and not provide a decrease in demand causing prices to lower.
Mr. Donohoe is currently consulting with Housing Minister Eoghan Murphy to decide what the scheme should look like in the future. The scheme was originally designed in a different time for the market and now needs to be restricted for the way that the housing market is currently performing. Mr. Donohoe stated, “We have to assess what that scheme is going to look like in the future and make decisions in relations to it, like I’ll have to make in relation to every other taxation measure in advance of Budget 2020.”
The current scheme according to the Exchequer has helped approximately 12,100 people with buying their first home at an expense of 171 million Euros. Additionally, the average grant for each home measures at just below 15,000 Euros.
The strict lending policies has caused many homebuyers to be unable to purchase new homes because they do not meet the current mortgage borrowing rules. This help to buy scheme pushes many young couples over the edge into the territory where they can afford to buy a home.