It looks like there might be some good news to kick off the new year for first-time buyers and for home builders as maximum property price ceilings under the First Home Scheme are set to increase.
As most here will be aware, the First Home Scheme was launched earlier this year and it is one of the key pillars in the Government’s Housing for All plan. The scheme is intended to help first-time buyers and buyers eligible for ‘fresh starts’ (through insolvency or separation) to secure a home by providing part of the purchase price in return for a minority equity stake. Another important objective of the scheme – as a supply side Government initiative – is to stimulate the new-build market across the country for local builders by improving affordability. And as home builders will know, each county has its own price caps. These caps have been criticised for being too low to help address viability issues in any meaningful way, so this announcement is welcome (though, arguably, overdue).
Through the scheme, there is a €400 million fund to help first-time buyers bridge the gap between their deposit and mortgage, and the total price of a new home. This fund aims to facilitate the purchase of up to 8,000 homes over a five-year period. Earlier this week, the outcome of the first of the scheme’s scheduled twice-yearly reviews of the price ceilings was published. In direct response, price caps on qualifying homes will be increased up to €75,000 in 30 of Ireland’s 31 local authority areas.
From 1 January 2023, price caps for houses in Dublin City, Cork City, Dún Laoghaire-Rathdown, Fingal and South Dublin are to increase from €450,000 to €475,000. Price caps in Cork County, Galway City, and Kildare are to rise to €425,000. Other counties, including County Galway, Limerick City and County, Kilkenny, Meath, Westmeath and Louth will see price caps rise from €350,000 to €375,000. The property price ceiling for County Laois will rise to €350,000. There is no change for Waterford City and County, which stays at the €350,000 mark, and the maximum price cap will rise to €325,000 for all remaining counties. Under the scheme, the maximum stake the scheme will take is 20 percent, if the buyer is also availing of the Government’s separate Help-to-Buy scheme, and 30 percent if Help-to-Buy is not used.
In effect, this makes every newly built private house and apartment in the country, valued at €325,000 or less, eligible for the First Home Scheme, which is great news for the industry – after a particularly challenging year – and for would-be home buyers in 2023.
As the Lotus Investment Group team winds down for the Christmas season, let us take this opportunity to thank you for your support throughout the year, which is greatly appreciated.
We wish you and yours a very Merry Christmas.
Lotus Investment Group