An extension of the Help to Buy (HTB) scheme is crucial and it should be expanded to include all buyers of a primary residence – not just first-time-buyers (FTB). That’s the argument from experts at MyMortgages.ie, who say that while it’s widely accepted that first time buyers need the security that the government financial support scheme extended past its December 2019 deadline, second time buyers have received less attention, with falling numbers in mortgage approvals for this group showing that they too are struggling.
“There were 478 property purchases last year in Westmeath by people who had previously bought a property, but who wanted or needed a new home. The average cost was €185,000. This means these homeowners would have had to get an average deposit of €37,000 together before they could buy.”
“It’s this 20% deposit that is a major stumbling block for second-time-buyers, and we believe that if the HTB 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.” Joey Sheahan, Head of Credit at MyMortgages.ie, said of the challenges they see families facing on a daily basis.
Mr. Sheahan added: “It’s important to remember that not everyone’s life path is the same. Some couples do not qualify for FTB 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 life as a twosome or 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 stronger 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 IVG 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 BPFI show a fall-off in second-time buyer activity in the market. While first time mortgage approvals were up 18.9% in the year to April 2019, mover / purchaser approvals actually fell by 0.8%.
MyMortgage.ie reports that approximately two in every 10 FTBs they deal with rely on the HTB scheme – which supports the argument that the schemes end date must be extended in order to ensure the viability of Ireland’s property market.
“In 2018, 189 first-time-buyers in Westmeath bought homes – given that we are seeing two in every 10 FTB avail of the HTB scheme, had it not been available, this may well mean that 38 or more of these FTBs would not 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 next year.” he said.
Source: Westmeath Independent
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