MINISTER OF State for Housing Michael Finneran has defended a Government scheme to assist first-time homebuyers which has reportedly received only four applications from the public despite a potential administration cost of €290,000 this year.
Under the terms of the Home Choice Loan scheme, the Government lends 92 per cent of the purchase price of a newly-built house to a prospective homebuyer, who must be a first-time buyer earning more than €40,000 per annum to qualify.
The maximum loan available under the loan scheme is €285,000.
“The Home Choice Loan scheme was designed to respond to the needs of those households that wished to become home-owners at the present time, but were unable to do so because of the credit crunch,” Mr Finneran said in a statement.
He claimed that the scheme had “never been about incentivising house purchase, merely facilitating it”.
No inducements were offered to prospective householders to enter the market.
“So I do not regard the numbers of applications received so far as a failure of the scheme.
“It tells me either that people are opting not to purchase now, or else the scheme has acted as a spur, in conjunction with Government’s wider efforts in recent months [through the bank guarantee and, more recently, recapitalisation], to ensure that Irish financial institutions have access to the normal liquidity and funding which they need to operate their day-to-day business and that they are beginning to re-occupy their traditional space in the mortgage market.
“Having said that, it is early days for the scheme, and I would not rule out quite a substantial pick-up in the numbers of applications in the near future,” Mr Finneran added.
“I have also said from the outset that the operation and need for the scheme will be kept under constant review.
“Once the Government is satisfied that the effects of the credit crunch have abated sufficiently and that ordinary first-time buyers have a fair chance of entering the housing market at a time of their choosing, the scheme will no longer be required.
“This is fully in line with Government policy,” Mr Finneran pointed out.
“In relation to the costs of the scheme, I should point out that a total of four people across the entire system – which covers all local authority areas – have been employed to roll-out the scheme,” said Mr Finneran.