As part of the Government’s Housing for All strategy, the Minister for Housing, Local Government and Heritage, Darragh O'Brien TD, has launched First Home, a scheme designed to make it easier for first time buyers to purchase new homes.
First Home provides first time buyers of newly-built houses and apartments in private developments with part of the purchase price for their home, in return for the Scheme taking a minority equity stake of up to 30%. The Scheme will make €400 million available, to facilitate the purchase of up to 8,000 homes over a 5-year period.
Key features of the Scheme include:
- Applicants must be first time buyers, but an applicant may also be eligible if they previously purchased or built a home in Ireland if they did so with a spouse, civil partner, or partner, and that relationship has ended (in which case, the applicant must not retain a beneficial interest in the previous property), or they have sold (or divested of) that property as part of a personal insolvency or bankruptcy arrangement, or other legal process as a consequence of insolvency.
- Applicants must have mortgage approval with a participating lender (currently AIB, Bank of Ireland and Permanent TSB) and must borrow the maximum mortgage amount available (up to 3.5 times income) and have a minimum deposit of 10% of the property purchase price.
- Buyers will have the option to buy out some or all of the Scheme's equity stake, or alternatively the Scheme will be repaid from the proceeds of sale of the house or apartment.
- If the Scheme's equity stake is not repaid within 6 years, the buyer will be liable to pay a service charge based on a percentage of the funds supplied by the Scheme.
- To avoid distortions in the housing market, a price ceiling will apply to the Scheme in each local authority area. This price ceiling will vary in each local authority area to reflect local market conditions, demand for housing, and incomes in each area. The price ceilings will be reviewed regularly.
The pace of delivery of the Housing for All plan has been impacted by wider global issues, such as inflation, supply chain disruption and instability caused by the war in Ukraine. First Home Scheme, due to be delivered in Q1 of 2022, is now here and is to be welcomed. The First Home Scheme website can be accessed here.