If the Help-to-Buy scheme is cut it will only worsen the housing crisis

The Construction Industry Federation (CIF) claims that if the Help-to-Buy scheme is in fact removed it will only worsen our housing crisis.

The CIF, an industry lobby group, said it will take time for the scheme to do what it is intended for. The scheme has expanded the first-time buyer market so banks will start lending to builders more to construct starter homes.

The Help-to-Buy scheme can help first-time buyers get a tax rebate of up to €20,000. The public has blamed this scheme for playing a part in the rising house prices this past year.

The Help-to-Buy scheme apparently has made residential building in key locations possible from the first-time buyers being assisted. The CIF director general, Tom Parlon, says that this scheme has significantly helped in the growth of residential construction. Since more first-time buyers can purchase a home, building starter homes becomes a more enticing move for builders.

The Central Statistics Office published on Tuesday a report saying that housing prices grew 2.2 percent last month. This is the largest monthly increase since last July.

In Dublin, however, there has been a 15 percent price increase from last year. Parlon suggests the reason why there might be price inflation could be a result of the second-hand home market, not a result of the scheme.

Since it has only been in effect since late last year, with more time and patience this scheme can increase the supply of homes.

It is estimated that this year there will be about 18,000 homes built while in 2015 it was only 12,666.

If there is a termination of this scheme, uncertainty may rise in the builders and they could withdraw and halt some of their future plans.

In reference to Scrapping Help to Buy scheme would compound housing crisis, CIF warns by Dominic Coyle in the Irish Times on 12 July 2017.

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