The Government-backed First Home Scheme witnessed more than 4,000 participants, the newest figures show. Home purchases under this scheme soared by 118% in the first three months of this year. A collaboration between various banks, including Bank of Ireland, AIB, and PTSB, and the State, the scheme, which is worth €400 million, has extended over €100 million in support, assisting over 1,500 homebuyers since its inception. The scheme is aimed at bridging the financial gap between the new property prices, mortgages and deposits.
In the first quarter of 2024, 262 houses were purchased through the scheme, an increase from 120 in the comparable period the year before. The first quarter of 2024 also saw a surge in new applicants by 49%, with a total of 927 applications, up from 623 in 2023.
In terms of geographical distribution, Dublin accounted for one-quarter of the scheme’s approvals, followed by 15% in Kildare, and 14% in Cork. Over 500 applications currently in the pipeline, most of which are expected to get the green light.
An average house bought under the scheme cost approximately €379,000, with the scheme expected to provide an average of €67,000, roughly 17% of the property’s price.
Michael Broderick, the Scheme’s Chief Executive, applauded the positive start to the year, stating the nearly 50% annual increase in applications bodes well for activity levels throughout the year.
Last year, the scheme expanded to renters interested in acquiring their rental homes and those keen on building their residences. A total of 160 tenants aimed to buy their rental homes and received 110 approvals, resulting in 32 successful purchases. The scheme has so far approved 43 out of the 60 applications received for building homes.
A majority, two-thirds, of the programme’s beneficiaries were also making use of the Help to Buy initiative. A recent assessment by KPMG denied any notable influence of the First Home Scheme on new house price inflation, whilst asserting the imperative of keeping a constant scrutiny on the risk. According to Darragh O’Brien, the Minister for Housing, the implementation of the scheme was progressing as planned and was aiding in addressing the affordability issue.
He stated that the scheme’s acceptance level is on a weekly incline, facilitating an increasing number of people to become homeowners thanks to its backing. The Minister further expressed satisfaction over the successful impact of the two scheme extensions – one catering to self constructions and the other to tenants purchasing homes. They are now also utilising the scheme for their needs.
O’Brien revealed his pleasure over the findings of the KPMG report, as it reaffirmed the scheme’s non-inflationary effect on the wider market. In fact, he noted that several house builders deliberately keep their values below the First Home price limit to enable buyers to benefit from the scheme. He assured that, as always, the scheme would undergo regular evaluation. However, he was greatly heartened by its acceptance thus far.