Builders urged to build houses aimed at first time buyers

Only one person in Mayo has used the First Home Scheme to buy a house in the county with builders urged to build more houses aimed at the first time buyer market.

The First Home Scheme, which is aimed at first time home buyers, was launched in July 2022 to help people bridge the gap between a first time buyer's deposit and mortgage, and the price of the new home.

The scheme is a joint venture between the Government and the three retail banks in the State, to provide equity funding in exchange for a 30 percent stake in a home valued at as much as €450,000. In Mayo the price ceiling to buy or build a first time home is set at €325,000.

A presentation on the scheme was made to members of Mayo County Council by Michael Broderick, Chief Executive of First Home Scheme, at yesterday's monthly meeting.

Mr Broderick said that the take-up of the scheme in Mayo was 'disappointing' with only six people approved for the scheme since it was launched.

“It is a little bit disappointing when I looked at the figures for Mayo where we had six approvals and only one person used the scheme to purchase a house. The reason I am here is we want people to use the scheme but appreciate there is a challenge in that there aren't many new homes being built and that is an issue.

“We have spoken to builders down here and the message is if you build the right type of property and with the assistance of this scheme there will be a cohort of purchases there. We have got that message across slowly to builders in other parts of the country, so-much-so that builders are very much building properties with this scheme in mind. It is in their own interest to build property within the price ceiling of this scheme,” he said.

Mr Broderick confirmed that the scheme is open to people who wanted to build their own home and to people who might have undergone a separation and no longer have access to the family home. He confirmed the price ceiling of €325,000 was set using the median price of a new house in Co Mayo.

Expressed frustration

While welcoming Mr Broderick's presentation, councillors expressed frustration that the price ceiling was too low with Independent councillor John O'Malley saying that first time buyers would not be able to purchase a 'hen house' around Westport for €325,000.

“If there were six approved in Mayo and only one took up the scheme, what is wrong with it that only one took it up,” said Cllr O'Malley.

“I am afraid that with the limit of €325,000 there is not much you would buy in the Westport area for that and that is the reality. There is a three bedroom house beside me and they are asking €640,000 which is cuckoo. Someone will come along but it won't be a local couple who will give close to what they are asking for. The young people are up against it and I am wondering will this scheme do them any good. I feel sorry for them.”

He was supported by a number of other councillors who said that unless there is further government intervention to help first time buyers they will not be able to afford a home. There was also a call for a relaxation of the planning rules to allow builders the opportunity to build homes without making a loss.

Cathaoirleach of Mayo County Council, Cllr Michael Loftus said that the feeling from the meeting was the figure of €325,000 is not sufficient and asked Mr Broderick to take that observation with him.

In response Mr Broderick said that he listened to what the councillors had to say and they needed evidence to support any call to increase the price ceiling.

“We need some evidence to support that instead of people saying today it needs to be €400,000. That's great ... I could go into every chamber in Ireland where they would all ask for €100,000 [added to the ceiling] but we need evidence to support that. If the evidence is there from agents and builders we can use that but I can't just go back and say it should be €400,000,” he said.