Help-to-buy scheme overhaul as President addresses housing crisis

The State is set to take an equity stake in people’s homes in an overhaul of the help-to-buy scheme, writes Elaine Loughlin.

A revamp of the scheme is now being considered which would see the lump-sum grant replaced with a State loan to buyers, similar to the British model.

It comes as President Michael D Higgins commented on the homelessness and housing crisis, stating that people are being “deprived of the most basic entitlements that most citizens take so much for granted”.

There was considerable debate within the Government prior to the introduction of the help-to-buy scheme last year.

It is understood that former finance minister Michael Noonan had fought to bring in the British-style equity-stake model.

Housing Minister Eoghan Murphy is also believed to be in favour of this model.

However, the final decision to tinker with the current grant will lie with Finance Minister Paschal Donohoe.

Addressing the homelessness issue yesterday, Mr Higgins reposted one of his own tweets from 2014 that said: “Being homeless is not just about being deprived of a roof over your head, it is about being deprived of a sense of belonging, a place within a community, full participation with a voice in society.

“Whether that homelessness takes the form of being forced to sleep on streets and in doorways and in public parks, or being placed in emergency accommodation with all the uncertainly that entails, or having to care for a family in just one room with no access to cooking facilities or outdoor space; homelessness removes so many of the acts of discretion that define freedom."

Mr Murphy yesterday informed the Cabinet of a number of measures he is working on in a bid to tackle the homelessness crisis, including the reintroduction of bedsits and a clamping down of landlords who are abusing loopholes in legislation around rent pressure zones.

Mr Murphy is also keen to cap the amount landlords can demand as a deposit to one month’s rent.

The Government is also considering the help-to-buy grant announced by Simon Coveney, the previous housing minister, for first-time buyers of new homes and is looking at changing it as part of Budget 2018.

Despite only being introduced in Budget 2017, the Government ordered a review of the help-to-buy scheme, which provided buyers with a grant of up to €20,000 towards the cost of a new home.

While Mr Donohoe will sign off on any changes, the housing minister will also have an input into any modifications to the scheme.

Mr Donohoe said: “I have received a report in relation to help-to-buy and I am considering that and will deal with that on budget day.”

Sources within the Government say that the issue for many prospective homeowners is with access to funds and believe that a loan scheme, which would provide money up front, would provide a better solution than simply handing out a grant to buyers.

A spokesman for Mr Murphy said: “We are awaiting the report and no decision will be made until then, but we are considering all options.

“Everything is on the table.”

It is understood that a move towards a loan-type model would require legislation as it would be changing the help-to-buy from a grant scheme to a loan scheme.

It comes as the Society of Chartered Surveyors Ireland warns that a decade-long housing crisis is looming unless the Government implements a range of radical and potentially unpalatable policies.

The Society says that current new-build projections — 17,000 for 2017 — added to the cumulative undersupply of the past nine years means it will be 2026 before the country is building the 35,000 new houses per annum which the ESRI estimates is required to meet demand.

This story first appeared in the Irish Examiner.

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