Coveney defends first-time buyer scheme for new builds

Minister for Foreign Affairs Simon Coveney has defended his decision to introduce a help-to-buy scheme for first-time buyers despite concerns it has inflated house prices.

Taoiseach Leo Varadkar and Minister for Housing Eoghan Murphy have indicated their willingness to abolish the measure implemented by Mr Coveney before he moved departments.

Speaking as he arrived at the MacGill Summer School in Glenties, Co Donegal, Mr Coveney insisted introducing the scheme was "the right thing to do".

“Because we are not building enough homes, the price of second-hand homes is going up in an unsustainable way,” he said.

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“People keep talking about the help-to-buy scheme as if its the only thing driving house prices to go up. It only applies to new homes and new builds which is only a fraction the number of houses first-time buyers are actually buying.

“I think it’s worked because we are now seeing builders now building a lot more starting homes than they were 12 months ago.”

Causing inflation

The scheme was launched in January by Mr Coveney, and has been criticised for causing inflation in the first-time buyer new-build market. It allows first-time buyers to apply for a rebate on taxes paid of as much as five per cent of the purchase price, up to a limit of €20,000.

The Minister said he introduced the scheme with the full support of the Cabinet, in particular the then minister for finance Michael Noonan.

Mr Coveney gave a speech at the opening of the MacGill Summer School last night. Two of his Cabinet colleagues – Minister for Finance Paschal Donohoe and Minister for Justice Charlie Flanagan – are among those who will address the event this week, along with Health Service Executive chief Tony O'Brien.

Mr Coveney was also questioned about his decision to move from the Department of Housing. He denied he had shirked responsibility by walking away from the position he had sought a year previously.

He said he had “put probably the most comprehensive housing plan in the history of the State together” after taking the role and that he felt that it was time for a new challenge now it was being implemented.