‘Help to buy’ housing scheme needed, committee told

Construction industry calls for State to take 20% stake in new homes

A "help to buy scheme", in which the State takes a 20 per cent stake in a new home, should be introduced to help home buyers, an Oireachtas committee has been told.

The Construction Industry Federation (CIF), addressing the new Oireachtas Committee on Housing and Homelessness, also called for a new SSIA-type account, in which home buyers would be given €100 for every €400 they saved.

The CIF, the Society of Chartered Surveyors in Ireland and the Institute of Professional Auctioneers and Valuers (IPAV) all called for a reduction in VAT on house building, from 13½ per cent to 9 per cent, similar to the reduction introduced to help the hospitality industry in recent years.

The committee, now in its second week, was convened to sit for a nine-week period and make recommendations to the new minister for housing.


The CIF made eight recommendations to reduce developers’ costs, costs to home buyers, and to ease pressure on the rental and social housing sectors.

Successful in UK

According to CIF director

Hubert Fitzpatrick

, “help to buy” schemes had operated successfully in Britain, similar to the way the “shared ownership” scheme had worked here in the past.

“The availability of equity loan schemes for housing could provide much assistance to home purchasers and also facilitate the industry ramp up increased building activity in key locations,” he said.

In addition, it would help home buyers trying to meet Central Bank lending requirements that buyers have 20 per cent of the price before being considered for a mortgage, Mr Fitzpatrick said.

For a €300,000 home, for instance, he said the government would contribute €60,000 for a 20 per cent stake in the equity.

CIF director general Tom Parlon said that in many areas it was cheaper to buy than to build a house. Local authorities should be buying these up where they could, he said.

Cost question

Despite their repeated calls for measures to reduce costs, none of the three bodies could answer how much it costs to actually build a house.

Pat Davitt, chief executive of IPAV, said: "Nobody seems to know how much it costs to build a property. We have been asking. We need to know how much it costs."

Several committee members, including Kathleen Funchion (Sinn Féin), Barry Cowen (Fianna Fáil) and Bernard Durkan (Fine Gael), called on the IPAV to address discrimination by some letting agents against tenants in receipt of rent allowance or the Housing Assistance Payment.

Mr Davitt agreed there were benefits to landlords with these tenants, particularly with guaranteed payment of rent.

Ruth Coppinger (Anti-Austerity Alliance) said there was a "running theme" in the calls for a tax breaks. These would come at a "social cost" in reduced revenues to the State. She criticised calls for a relaxation of new Central Bank rules on mortgage lending.

“It’s not going to reduce the cost of housing. It will just increase the amount of debt people are able to take on.”

Kitty Holland

Kitty Holland

Kitty Holland is Social Affairs Correspondent of The Irish Times