New leadership often brings about new ideas and the recent elevation of Leo Varadkar to Taoiseach could have a big impact on the housing market in the months ahead.
After replacing Enda Kenny, one of the new Taoiseach’s first tasks was deciding his new Cabinet team with Eoghan Murphy replacing the man Varadkar tipped to the position, Simon Coveney, as the new Minister for Housing.
The new minister might be still adjusting to his elevated role but it is clear from the outset he has one of the biggest challenges ahead given rising house and rental costs, not to mention the ongoing issue of homelessness.
It will likely be a few weeks or months until his ideas – good, bad or indifferent – are known but one thing that could be facing the axe is the help to buy scheme which was introduced by his predecessor in last October’s Budget.
The scheme, which provides first-time buyers with grants of up to €20,000 when purchasing a newly built property, has been criticised by many as pushing up house prices without encouraging new building.
Speaking on RTÉ’s The Week in Politics last weekend, Murphy admitted he was “looking at” the scheme, saying: “We have a review under way at the moment and I will wait until that review is concluded.”
Asked whether or not he was concerned that the scheme might in fact be inflationary, Murphy replied: “It is a concern of mine.”
That has led to increased speculation that the help to buy scheme could be scrapped. What this could mean in the short term is prices for new homes being pushed up even further amid fears the incentive will be abolished.
The latest figures from the CSO showed house price inflation accelerated to 10.5% nationwide in the year to April.
As of the end of last month, Revenue had received 6,607 applications for stage one of the Help to Buy incentive with 4,095 of them approved.
There are two stages involved in the process. The initial application, stage one, where applicants provide proof of their mortgage, and stage two, the claims stage, where more details and documentary evidence of mortgage drawdown is needed.
However, it is possible that many of the applicants will never make a claim during stage two for a variety of reasons.
These could include individuals who do not go on to obtain mortgage approval or who may decide to purchase a second-hand property.
To date, 1,917 stage-two claims have been made, of which 1,376 have been approved.
We’d like to know your thoughts on the matter.
- Do you think the help to buy scheme should be scrapped?
- Is it a contributory factor to driving up house prices?
- Have you benefitted or considered applying for the scheme?
Have your say below…