Help-to-buy scheme may be scrapped, says Eoghan Murphy

New Minister for Housing Eoghan Murphy has said he is concerned the help-to-buy scheme has not delivered an adequate supply of housing.

The scheme, which is now expected to be scrapped, was launched in January by Mr Murphy’s predecessor, Simon Coveney, and has been criticised for causing inflation in the first-time buyer new-build market.

“It is a concern of mine and it is a concern that perhaps it hasn’t achieved the delivery on the supply side that we need,” Mr Murphy said on Sunday.

The scheme allows first-time buyers to apply for a rebate on taxes paid of as much as 5 per cent of the purchase price, up to a limit of €20,000.

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Appearing on The Week in Politics on RTÉ, Mr Murphy said a review of the scheme was under way. He said he would consider the findings of this review before making any decision on the scheme's future.

‘Complete mess’

Fianna Fáil's finance spokesman Michael McGrath told The Irish Times the Government had created a "complete mess" in the housing market.

“When you do an intervention in the property market you are creating a distortion, and when a scheme is brought to an end there is further distortion,” Mr McGrath said.

His instinct told him the scheme was contributing to rising house prices, but “any decision that needs to be made should be made on the basis of evidence”.

Mr McGrath said Fianna Fáil had requested an independent impact assessment which should be completed in August.

Sinn Féin has called for the scheme to be suspended and has welcomed Mr Murphy’s decision to look again at the scheme.

Mr Murphy was Taoiseach Leo Varadkar’s campaign manager in the Fine Gael leadership contest.

After naming his new Cabinet last week, Mr Varadkar announced a review of the last administration’s keynote housing policy, Rebuilding Ireland.

Greater public funding for social housing is now expected.