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Help to Buy scheme ‘torpedoed’ by Central Bank changes – Doherty

23 November, 2016 - by Pearse Doherty TD

Sinn Féin Finance spokesperson Pearse Doherty TD has said the changes to the mortgage rules announced by the Central Bank have “torpedoed” the government’s ill-thought out Help to Buy Scheme.

Deputy Doherty said:

“Today’s changes to the mortgage lending rules have torpedoed the government plan for a Help to Buy Scheme. The scheme was already in serious trouble with the government having to accept a review in a year’s time. Today, that review and the whole scheme have been made completely redundant.

“The Government has repeatedly made it clear that the rationale for such a scheme was to assist first time buyers reaching the minimum deposit required under the central bank rules. 

“Until now, a first time buyer purchasing a €400,000 house was required to have a deposit of €58,000. The governments help to buy scheme reduced this amount to €38,000.

“However, changes made by the Central Bank today have reduced the deposit required on a €400,000 house for a first time buyer to €40,000 making the government’s scheme unnecessary.

“If the Government was to continue with this scheme, it would simply reduce the savings required so that a buyer would only need at most 5% of the mortgage. That would bring us dangerously close to a return to 100% mortgages which is in nobody’s interest and would have the effect of driving up house prices.

“It is clear the Central Bank has adopted a long term view of the rules needed, while the Government is plodding along with a short term and dangerous plan.

“The Government needs to realise that the ground has shifted and their help to buy scheme is now more dangerous than ever.

“Minister Noonan now needs to move to withdraw the government scheme and invest the €50million cost of it back into the housing crisis.” 

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