A recent study by KPMG has brought forth reassuring findings regarding the government’s First Home Scheme (FHS). Contrary to previous concerns raised by various agencies, including the central bank, KPMG’s report asserts that the FHS will not drive up property prices.
Despite initial apprehensions about increased construction costs, material availability, and energy efficiency preferences, KPMG’s review found no evidence linking the FHS to rising property prices. Instead, the scheme has demonstrated positive impacts on increasing homeownership and housing supply.
The FHS offers vital support to single-person households and individuals struggling to secure mortgages, fostering accessibility for both young and older demographics.
However, the report does acknowledge other factors contributing to the upward trend in property prices, such as escalating building material costs, regulated component availability, and a shortage of energy-efficient homes.
Implemented as a joint initiative between the government and leading financial institutions, including EBS, Haven, Bank of Ireland, PTSB, and AIB, the FHS allocates €400 million to aid first-time homebuyers. Government assistance of up to 30% of the house price, provided as interest-free equity over six years, aims to bridge the financial gap between mortgage and deposit requirements.
While the FHS presents a promising solution to housing affordability challenges, continued monitoring is advised to mitigate the risk of price surges in the property market.