Recent increases in house prices are not due to the Help to Buy scheme, according to the Construction Industry Federation (CIF).
The CIF’s comment comes as Minister for Housing Eoghan Murphy’s review into the Help to Buy scheme is expected August 31.
The Help to Buy scheme was introduced in Budget 2017 to increase the housing stock and consists of a payment in the form of tax-back that makes it easier for first-time buyers to secure a mortgage on a new home or self-build project.
CIF Director Tom Parlon said: “The house price inflation that we are seeing, is happening in the vast majority of cases, in the second-hand home market- a market that those availing of the Help To Buy Scheme are not involved in. These house price increases are driven by scarcity in second hand home market, which accounts for 90 per cent of transactions according to a recent report by Daft.ie.”
He said the scheme had been good to builders, had created a viable market for first time buyers, and resulted in a six fold return for the exchequer: “If the price of a new home is €250,000, it will cost the government €15,000 or so under the Help to Buy Scheme and yield €100,000 in direct and indirect revenue .”
“The Help To Buy scheme has been a significant contributor to the growth in residential construction activity. Any suggestion of a withdrawal of this scheme could have a detrimental impact on confidence and the ability of house builders to maintain and increase their residential building programmes.”
Critics of the scheme say it has not led to a significant growth in numbers for new housing yet contributed to a rise in house prices.
There are over 250 qualifying contractors currently registered for the HTB scheme and self-builders are entitled to it (terms and conditions apply for all applicants). This includes going down the direct labour route, with the assistance of a solicitor.