Doubling in numbers availing of State shared-equity scheme

The First Home Scheme has reported that 1,500 buyers have now availed of the shared equity arrangement.

It comes as new figures from the Central Bank show that mortgage rates in this country barely moved in February.

The First Home Scheme was set up to help first-time buyers bridge the gap between their mortgage, the deposit and the price of a new home.

It is a joint venture between the State and AIB, including subsidiaries EBS and Haven, Bank of Ireland and PTSB. It has €400m in funding.

Under the scheme, the State provides an interest-free equity for a six-year period for a stake of up to 30pc in the home.

There are maximum property price ceilings for each local auth­ority area.

The latest progress report from scheme bosses shows that there was an 118pc increase in homes bought using it in the first three months of this year, compared with the same period last year.

Some 4,000 buyers have been approved since it was launched in July 2022.

And 66pc of scheme’s users are also using the other leading State support for first-time buyers, the Help-to-Buy scheme.

A total of 262 homes were bought using First Home in the January to March period this year compared with the same quarter last year.

The pipeline of applications continues to grow, with the number of new applications 49pc higher than the same period last year.

While 4,005 buyers in 25 counties have been approved by the scheme, a total of 1,517 buyers in 25 counties have already completed the purchase of their home using the Scheme.

Housing Minister Darragh O’Brien claimed the scheme was working as it was intended to do by making home ownership a reality for first-time buyers by bridging the affordability gap.

A report commissioned by First Home Scheme, and carried out by KPMG, found no evidence to suggest that the it is inflating property values.

The findings are controversial because critics insist the scheme was inflating property prices.

There has also been criticism that the majority of first-time buyers last year did not get the Help-to-Buy scheme or benefit from the First Home Scheme and now pay more for their mortgages as they do not qualify for “green” lending rates.

Meanwhile, mortgage rates in this country remained broadly steady in February, according to the latest data from the Central Bank of Ireland.

At 4.29pc, the average interest rate on a new mortgage rose slightly from the 4.27pc rate recorded in January.

Since last September Irish mortgage rates have remained largely steady.

Ireland currently has the seventh highest rates in the Eurozone.

Rates vary across the currency bloc from as low as 1.97pc in Malta to as high as 6.05pc in Latvia.

The Eurozone average fell for the third month in a row to 3.91pc.

Mortgage rates have begun to ease in recent weeks in some countries as the cost of raising funds on capital markets eases in advance of an expected drop in ECB rates over the coming months, said Daragh Cassidy, head of communications at mortgage broker Bonkers.ie.

Over the past three weeks AIB, EBS and Haven cut their green mortgage rates. PTSB cut its four-year fixed rate for the second time since December.

And Bank of Ireland has introduced a new, flat variable rate of 4.15pc for all customers whereas previously it was as high as 4.75pc in some cases.