Long before it was even announced, the help-to-buy scheme had been a source of contention.
Now less than a year after details of the scheme were made public on budget day, the grant for those looking to secure their first home may be overhauled.
But tinkering with a single scheme to help one cohort get a foot on the property ladder will not solve our escalating homelessness, rental, and housing crisis.
Multi-faceted approaches are required to tackle soaring rents, difficulty in buying a home, and the increasing number of homeless people.
You can’t solve one without addressing the others. Young couples are unable to find or afford a first home. This has led to increased demand for rental properties. In turn, families struggling to afford a rented house have been pushed out into hotels and other temporary accommodation.
It will take a thousand pin-pricks from all sides to kill what has become an unwieldy housing crisis beast.
Ramping up the number of homes built each year is an aspect that the Government knows is essential.
Simon Coveney, the former housing minister since moved to foreign affairs, had hoped that providing first-time buyers with a grant to put towards a new home would lead to an increase in the level of house building.
However, the Society of Chartered Surveyors Ireland yesterday came out to say that current new-build projections — 17,000 for 2017 — added to the cumulative undersupply of the past nine years means it will be 2026 before the country is building the 35,000 houses per annum which the ESRI estimates is required to meet demand.
It is yet to be seen whether putting up to €20,000 in the hands of first-time buyers will entice developers to up the rate of construction to meet demand.
Less than a year after the help-to-buy scheme was introduced, it now appears that the Government believes it should have gone with a model based on the successful UK equity-stake scheme.
That model involves the government providing an equity loan of up to 20% of the cost of a person’s newly built home. This means young couples or individuals, struggling to pay rent while saving for a deposit, only need a 5% cash deposit and a 75% mortgage to make up the rest.
Homeowners are not charged loan fees on the 20% loan for the first five years.
Interest does kick in after six years — albeit at a low rate — and house-owners must pay off the loan after 25 years or when they sell their home, depending on which comes first.
As the pre-budget debate heated up last year, it was clear that there were significant differences in Government circles as to how the first-time buyer’s incentive would be rolled out.
It is understood that the Department of Finance — then led by Michael Noonan, with Eoghan Murphy as junior minister — had favoured the UK model when a help-to-buy scheme was being discussed.
Whether the Government now tinkers and changes the help-to-buy scheme remains to be seen — but it wouldn’t be the first U-turn a party in power has made.
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