120 buyers pounce on Ireland Help to Buy scheme within hours

120 buyers raced to apply for Ireland’s Help to Buy scheme within hours of it launching this week.

On Tuesday 3rd January 2017, Ireland introduced its new scheme, which follows similar measures in the UK and Scotland designed to boost home ownership and encourage first-time buyers to step onto the huosing ladder.

Ireland’s scheme will let eligible first-time buyers get up to 5 per cent of the purchase price of a new home or apartment back in the form of a tax rebate, which can then be used to pay off part of the deposit on the property. The rebate goes up to a maximum of €20,000, with first-time buyers who purchase, or self-build a home between July 2016 and December 2019 worth up to €500,000 eligible to apply for the scheme. Applicants must take out a mortgage of at least 70 per cent of the value of the propery and also live in the home for the first five years after their purcahse.

Applicants must take out a mortgage of at least 70 per cent of the value of the property to qualify and must live in the property for the first five years after they buy or build it. Investment properties are not eligible and the homes must be the buyer, or joint buyers’, first home.

The scheme was announced in October 2016 by the Irish government, designed to help those struggle to afford a deposit of between 10 per cent and 20 per cent, under the tightened Central Bank mortgage restrictions introduced in February 2015. Since then, the Bank has eased its rules, which means the first-time buyers now need a deposit of 10 per cent to purchase a home, 5 per cent of which can come from the Help to Buy scheme.

A survey among first time buyers, conducted by RED C for Bank of Ireland following its announcement, found that a majority, 51 per cent, believe the new scheme will make it easier for them to buy their first home, while 33 per cent said it would not help, and 16 per cent were unsure.

Speaking about the First Time Buyer Survey, John O’Beirne, Head of Mortgages, Bank of Ireland, said: “There’s a clear welcome from first time buyers for the Government’s Help to Buy initiative. We know from talking to our customers that this cohort is under pressure to save the required deposit, and our survey demonstrates that first time buyers are generally saving for a long time and are very committed to achieving their goal of owning a home.”

That positive sentiment has been proven this week, with 120 buyers applying for the Help to Buy scheme within the first few hours of its doors opening. That number is expected to continue growing by the Revenue Commissioners, as applicants first have to register with the tax authority’s website and potentially complete several tax returns.

Some have speculated that the scheme could drive up property price growth, with house prices forecast to grow by potentially double digits in 2017.