Government Help-to-buy scheme under opposition scrutiny amid claims of house price inflation

Government Help-to-buy scheme under opposition scrutiny amid claims of house price inflation
The government's expansion of the Help to Buy scheme has come under criticism. Picture: iStock

The Government is coming under criticism for contributing to the inflation of the housing market.

Sinn Féin say it has evidence that auctioneers and developers have increased the price of homes in Cork, Dublin and Kildare by €10,000 in response to the expansion of the Help-to-Buy scheme.

The scheme is part of the July stimulus package and offers first time buyers a tax rebate of up to €30,000, as opposed to €20,000 previously.

Housing spokesperson with Sinn Féin, Eoin O'Broin, says the price increase is inevitable and is not "surprised at all."

Mr O'Broin said: "I'm not surprised at all. Philip Lane when he was the governor of the Central Bank gave evidence to the Oireachtas Finance Committee, 

"To say that these kind of Help-to-Buy schemes in fact don't help people to buy at all, they simply push up property prices.

"It would be much better if this money was invested in local authorities to deliver genuinely affordable homes rather than make private sector homes more expensive for struggling first-time buyers."

Meanwhile, the Labour Party has called for the Help-to-Buy scheme to be scrapped describing the policy as a "developer bailout" in a statement this afternoon. 

Labour spokesperson on Housing, Rebecca Moynihan said the extension of the Help-to-Buy scheme has led to price inflation and "should now be scrapped because it’s clear it won’t make a jot of difference to someone trying to buy a house but benefits developers and speculators."

Ms Moynihan said: "We know that the Help to Buy scheme has led to higher prices in the past, and in at least 40% of cases supports those who already had a deposit.

The Government's housing policy will directly cause prices to increase by €10,000 that will only benefit developers at the expense of the public purse. 

"There was also no rational reason for increasing the purchase threshold to €500,000 as it simply makes new housing more unaffordable by inflating prices."

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