Lack of houses hampering scheme for first-time buyers

The First Home Scheme has been amended to increase the price ceilings for eligible applicants, following a review.

Local authority price ceilings for houses are now €350,000 in Cavan and €325,000 for Monaghan.

The scheme, launched in July last year, is a €400m fund established to help first-time buyers bridge the gap between their mortgage, deposit and the price of a new home.

Fianna Fáil’s Robbie Gallagher was among the local representatives to welcome the extension of the scheme.

However, Declan Woods, principal auctioneer of Sherry Fitzgerald auctioneers Cavan, feels the lack of newly-built homes in the county means it will be of little benefit to first-time buyers in Cavan.

“While it is a huge help, new housing is something we don’t have very much of in Cavan,” he said. “Currently it is cheaper to buy a house than it is to build.”

The auctioneer says the majority of new houses being built in Cavan are social housing and the benefits of the extension of the scheme will be felt more keenly elsewhere.

“The only new housing you really see is what is termed social or affordable housing. It wouldn’t have the same impact it would have in Meath or in Mullingar where more houses are being built,” remarks Declan.

However, he’s hopeful that perhaps some unfinished houses or estates will fall under the scheme.

“These were started in the noughties and the houses were taken to a particular level with the roofs windows and doors on them, but nothing else was done. And they will still qualify for it because they are a new build and were never lived in, once the builder or the contractor qualifies for the scheme, but they are small in number,” says Declan.

A lack of services is also hindering the scheme from being rolled out to benefit more people, he believes.

“It’s a sad anomaly that the one part of Cavan that will comfortably facilitate and support new building is Virginia but it doesn’t have the services or the infrastructure to support new builds so it can’t get the planning permission,” he remarks, in reference to a capacity constraint on the waste water treatment plant there.

Declan also says the price of building a new house is currently too expensive for the market to pay for it.

“The price we can get for a new, three-bed semi-house is somewhere around €250,000, potentially rising to €265,000. But the cost of building it is north of €285,000. This isn’t just in Cavan, but it Longford, Donegal, Leitrim, Roscommon as well as parts of Sligo and Monaghan.”

Even if a similar scheme was brought in for second-hand homes, Declan says it would not be of much use due to a lack of stock.

“If something could come in for the second home that would be a big assist, but here is a lack of stock in the marketplace. In 2018 and 2019, there was a huge tightening of stock, but in the summer of 2020 when we reopened after the first wave of the pandemic, we saw that there was a massive rush on the market and an increase in transactions.

“People were selling and there seemed to be stock of a reasonable level, even if it was second-hand in this region.

“But unfortunately, we now are getting back to a situation where stock levels are very low again. So even if you had an incentive scheme for second-hand houses, we just don’t have enough of them (houses).”