Marita Moloney
Marita Moloney

09.56 18 Dec 2020


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Plans for a new affordable housing scheme which would help finance first-time buyers have been revealed.

Proposals are to go to Cabinet next week which would involve the Government taking up a 30% stake of equity in property purchases.

It is understood there will be no salary caps for applicants to the scheme.

In September, the Minister for Housing Darragh O’Brien told Newstalk he believes "salary caps are arbitrary" and that "the definition of affordability should be around net income".

Minister O'Brien said that "affordable housing for working people has always been a priority" for him.

He explained at the time how the equity model would work: "You would buy a portion of the house and the state would buy a portion of the house and it's an investment by the state in your home.

"In the future, that can be bought back, or not, and if the house is sold it would be paid back at that stage or the state would just retain it."

Speaking on The Pat Kenny Show today, Karl Deeter from Irish Mortgage Brokers said the plans will not be a solution to the cost of housing.

He said similar schemes have worked in the UK and so it makes sense for Ireland to "borrow good ideas from other places".

However, he added: "That said you would have to wonder about the sensibility of a scheme that by design offers loans to people that in order to obtain them, can't qualify for the mortgage that would normally be required to buy that same property.

"So there's good things and there's things in this that need to be teased out."

Mr Deeter said it was "important" that salary caps are not included in the plans as this is often a "contentious" issue for people.

He added: "The way they're [the Government] is thinking about this is they're looking to bridge the affordability gap which is the bit most borrowers succeed or fail on.

"The Government don't have to play by Central Bank rules and this can circumvent those rules and that's what they're looking to do."

Plans revealed for affordable housing scheme to help first-time buyers

00:00:00 / 00:00:00

    

Main image: For sale signs in Co Kildare | Credit: Eamonn Farrell/RollingNews.ie

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