Scheme to help first-time buyers to be extended to more people

A €480 million fund set up to help first-time buyers to bridge the gap between their mortgage, deposit and the price of a new home is to be extended to more buyers.

This extension of the First Home Scheme follows the latest of the scheme’s scheduled twice-yearly reviews of the price ceilings that apply to qualifying homes.

The review will result in increases of €25,000 in the ceilings applying to 14 of Ireland’s 31 local authority areas.

The ceiling in Limerick will increase by €25,000 to €425,000 for houses. The ceiling for apartments in Limerick remains at €450,000.

The other 13 counties’ ceilings are increasing by €25,000 to €350,000 for houses and apartments.

The scheme is a joint venture between the State and three banks, currently AIB (including EBS and Haven), Bank of Ireland and PTSB, with an ability for other authorised mortgage lenders in the Irish market to join the scheme.

The changes, which take effect immediately, will allow additional first-time buyers to qualify for the scheme.

These people would have been ineligible for the scheme until now if the price of their chosen home was above the price ceiling for their local authority area.

The changes may also encourage the supply of additional new homes in areas with low stock of new homes currently.

The new price ceilings mean that every new house valued at €350,000 or less will be eligible for the scheme, irrespective of its location in Ireland. Higher price ceilings of up to €500,000 for apartments and €475,000 for houses apply in areas of greatest demand.

Minister for Housing Darragh O’Brien said: “This is positive news for first time buyers as the changes being announced today in the 14 counties will extend the reach of the First Home Scheme and make it easier for more people to avail of the scheme.

“The scheme has been a big success in making home ownership a reality for people who would have been unable to bridge the affordability gap otherwise and just recently Government and our partner banks committed further funding to the scheme.

“It’s making a real difference for these people and I expect they will be joined by thousands more in the coming years.”

First Home Scheme chief executive Michael Broderick said: “Our price ceilings aim to get the balance right between encouraging usage of the scheme, promoting housing supply and avoiding price distortion in local housing markets.

“The six-month review mechanism for our price ceilings is an important feature in providing the right level of flexibility, so the First Home Scheme can evolve to reflect market conditions in every city and county in Ireland and help as many first time buyers as possible.”