An extension of the Help-to-Buy scheme is crucial and it should be expanded to include all buyers of a primary residence not just first-time-buyers. This is the contention of experts at MyMortgages.ie, who say while it’s widely accepted that first-time-buyers need the security of the Government financial support scheme being extended past its December 2019 deadline, second-time-buyers have had less attention, with falling numbers in mortgage approvals showing that they too are struggling.
Joey Sheahan, head of credit at MyMortgages.ie, said they see families facing daily challenges. “There were 357 property purchases last year in Roscommon by people who had previously bought a property, but who wanted or needed a new home. The average cost was €115,000. This means these homeowners would have had to get an average deposit of €23,000 together before they could buy. It’s this 20% deposit that is a major stumbling block for second-time buyers. And we believe if the Help-to-Buy scheme was to be expanded to include those who may have bought a home in the past but who now need to purchase a different primary residence, for whatever reason, then many more would be able to do so.” Mr Sheahan said it’s important to remember that not everyone’s life path is the same.
Some couples do not qualify for first-time-buyers’ status because they may have bought properties several years ago before they met. Often these properties are small or in the wrong location, or simply not suitable for a growing family.
“We are also seeing more and more families who have gone through several rounds of IVF – clocking up tens of thousands in medical bills. For these families, while their incomes may be strong and so paying back a mortgage on a more suitable home would not be an issue – they simply don’t have the financial resources following their IVF journey to save the necessary 20%. We have seen many instances of this and its difficult because these couples have been through so much already.
“The most recent figures from the Banking and Payments Federation Ireland show a falloff in second-time-buyer activity in the market. While first-time-buyer mortgage approvals were up 18.9% in the year to April2019, mover/purchaser approvals actually fell by 0.8%.” he said.
Mr Sheahan said “In 2018 132 first-time-buyers in Roscommon bought homes- given that we are seeing two in every 10 first-time-buyers avail of the Help-to-Buy scheme, had it not been available, this may well mean that 26 or more of these first-time-buyers would have been able to get on the property ladder. If the scheme does not live past December 2019, we will certainly see a dramatic fall off in the number of first-time-buyers entering the market next year.
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