Minister insists loan plan will work

HOUSING Minister Eoghan Murphy has defended his new home-loan scheme against accusations that it will be of little use to the majority of first-time buyers.

The loans have a fixed interest rate of 2pc to 2.25pc for 30 years, and can be used to buy a house worth €320,000 in Dublin, Cork and Galway. However, Opposition parties have said Mr Murphy is missing the point by providing cheap credit when there is a lack of homes on the market.

“Too many of our younger generation are being priced out of the market nationwide. There may be some that could benefit from the scheme announced this morning but the vast majority, particularly single people and couples, will not benefit due to the existing mortgage rules imposed by the Central Bank,” said Fianna Fáil’s Barry Cowen.

“A distinct lack of housing supply, more importantly a lack of affordable housing, remains at the very core of Ireland’s housing crisis.”

The Labour Party’s Jan O’Sullivan said the new scheme was nothing more than a tweaking of the existing local authority loan scheme. “While this change is welcome and long overdue, people can’t buy affordable homes that don’t exist,” she said.

Speaking after a housing summit with the CEOs of the country’s local authorities, Mr Murphy said: “When we looked at the figures around the Greater Dublin Area and Cork and Galway, we saw that, yes, there was more than enough houses available at that price for first-time buyers. But that isn’t necessarily going to be consistent across every local authority area in the Greater Dublin Area and Cork and Galway.”