NEW GOVERNMENT PLAN
FIRST TIME BUYERS
MORTGAGE GUARANTEE SCHEME
Government concerns about the ability of the banks to provide mortgages, plus the lack of supply in the housing market, have led to the announcement of a new plan to make it easier for first-time buyers to get a mortgage.
Called Construction 2020, the new plan contains 75
action points to be implemented in the next 12 months.
It is hoped that this new plan will result in increased
numbers of new houses being constructed, from 8,000
units in 2013 up to 25,000 by 2016. The plan also
aims to create 60,000 jobs in the building sector.
A portion of the mortgages to first-time buyers of new
houses will be guaranteed by the State in order to allow
banks provide more loans. The scheme would be restricted
to first-time buyers of new houses, with a cap on
the price of the house. Only buyers of average
two- or three-bedroom new houses would benefit.
The sharing of the risk will be undertaken through a
government mortgage insurance scheme, paid for by
the banks. This scheme will allow the first-time buyers to buy their houses with smaller deposits, by giving out mortgages worth up to 95% of the value of the home. A lower level of risk to the bank will also potentially lower the buyer's mortgage repayments.
The increased level of mortgage funding is expected to provide certainty to the construction industry, allowing more homes to be built.
The new insurance scheme will essentially protect the banks from losing money if the mortgage holder fails to keep up payments.
The shortage of new housing in Dublin and other urban centres is causing property prices to soar, as demand for family homes is not being met by the supply. In the capital, there is intense competition to buy houses in areas inside the M50 close to schools, hospitals and public transport.
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HOUSE PRICE CHANGES
FIRST 3 MONTHS OF 2014
DAFT, MYHOME, DNG REPORTS
This summary is based on recent articles in the Irish Times and Irish Independent newspapers. The information provided on this page is liable to change at any time.
All information supplied by IrishHouse.ie/PropertyRegister.ie is subject to errors & omissions and does not constitute legal, investment or any other form of advice. Always obtain independent professional advice for your own particular situation.
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