Surge in numbers using State equity scheme to buy a home

The First Home scheme was set up to help first-time buyers to bridge the gap between their mortgage, deposit and the price of a new home.

New figures show that 3,200 buyers have been approved and received First Home scheme eligibility certs since it was launched in July 2022.

Some 1,255 homes have been bought using the scheme so far.

Drawdowns from the scheme are now around five times higher than they were in the second half of 2022.

The scheme is a joint venture between the State and AIB, including subsidiaries EBS and Haven, Bank of Ireland and PTSB. It has €400m in funding.

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Last year the scheme was widened to include self-builders who are constructing their first home.

Up to then, it had been open to people buying newly built houses and apartments in private developments, and to renters whose landlords are seeking to sell the property they are renting.

Critics have accused the scheme of inflating property prices.

Under the scheme, the State provides an interest-free stake for a six-year period for a stake of up to 30pc in the home.

The report shows continued strong interest in the Scheme, with 3,196 buyers approved and 1,255 homes already bought using the Scheme. Of the 1,255 homes bought, 1,118 were bought in 2023 and 137 were bought in 2022 (the Scheme having commenced operations in July 2022).

First Home said there was a big uplift in use of the scheme last year.

Up to the end of last year there were 3,196 buyers in 25 counties approved by the scheme and have received eligibility certificates allowing them to buy their chosen home.

A joint application is counted as one buyer, not two.

Some 1,255 buyers in 23 counties have already completed the purchase of their home using the Scheme.

A further 429 applications are currently being processed, with approvals expected to issue shortly in the majority of these cases.

A total of 7,530 potential buyers have registered their interest in the Scheme, with over 5,000 new expressions of interest submitted in 2023.

Chief executive of First Home Scheme Michael Broderick said the average purchase price for purchases completed last year was €380,000.

The average support being provided by First Home in these cases was €67,000.

This works out at 18pc of the average purchase price.

Most of the approvals have been for buyers in Dublin, Cork, Kildare, Meath and Wicklow, with the remaining 23pc spread across 20 counties throughout Ireland.

Housing Minister Darragh O’Brien said the figures published today show the First Home Scheme is working effectively and successfully making home ownership a reality for large numbers of first-time buyers.

Under the scheme no payments are due to the First Home scheme if the equity stake is bought out in the first five years of ownership.

After that period scheme participants will be liable for a service charge starting at 1.75pc of the euro value of the original equity provided by the First Home scheme.

First Homes scheme has no income limits for those who apply for it. However, there are limits on the value of properties that will qualify for the scheme in each local authority area.