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The Help To Buy Scheme for First Time Home Buyers

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A Helping Hand onto an Elusive Ladder

We have spoken at length in the past about the multitudinous issues facing prospective first time home buyers in our current climate in Ireland. From saving deposits amidst paying skyrocketing rents, to being effectively written out of the narrative due to stricter borrowing rules and increasing home prices across the country. As a result it was recently reported that owning their own home has become more of a distant dream for many, rather than a feasible option for the future, with many saying that it would take them many years to save a deposit and even then they may not be able to afford the costs on current salaries. Rather than sticking with the unpopular opinions of recent months, of giving up avocado toast and living on your parents couch while asking for a loan of €30,000 we decided that today we would take a look at the more positive side of being a first time or prospective first time buyer. Believe it or not there are some options available to you out there, and we hope that access to these may make your dream more of a reality.

We all know about the all-important 10% deposit required to get your foot onto the first rung of the property ladder, as well as the additional funds required on top of these for legal costs etc. As mortgage relief is no longer an option, this all adds up quickly and when paired with every increasing house prices which don’t seem inclined to start falling any time soon, can lead to a number of hopeful buyers who simply cannot afford the costs. Whilst seeking a loan from a local authority may be an option for some, there is still the matter of a deposit to be raised and countless costs to be taken into account. The recent installation of the Help to Buy (HTB) Initiative may be a saving grace for some buyers, and has already helped many families find their new homes.

Essentially, the Help to Buy (HTB) scheme is an income tax rebate scheme now in place in order to help first time buyers buy new or self builds, and does not apply to second hand dwellings. This scheme allows buyers a rebate of their income tax paid over the previous 4 years as well as a refund of DIRT and will run until the end of 2019.

Naturally there are a number of stipulations on this as follows:

  • You must take out a mortgage of at least 70% of the cost of the property.
  • Applies only to properties costing €500,000 or less.
  • Applies only to new builds.
  • You must occupy the property for 5 years or more from the date it is habitable.
  • You must be fully tax compliant for the 4 years prior to your claim, complete a tax return form (Form 12) and pay any outstanding taxes that may be owed.
  • PAYE employees can apply using Revenue’s My Account system whilst self-assessed employees will apply through Revenue’s online system (ROS).

Should you have any queries or require further information on this or any other business or financial matter please don’t hesitate to contact us here at EcovisDCA’s new head office, where as always we will be delighted to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Blowing Up the Housing Bubble

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The housing ladder has remained a hot topic of conversation since the economic downturn and subsequent changing of the rules for applying for a mortgage. The conversation doesn’t seem to be going anywhere as the concern of Ireland falling into the housing bubble trap increases as more and more prospective buyers find themselves unable to pay increasing asking prices.

This week it was reported that these increasing house prices do not look likely to slow down in the coming years. Goodbody Stockbrokers have stated in their latest economic report that the average price of a house is set to continue to rise by up to 10% this year followed by another 8% in 2018 meaning an additional 18% cost increase on houses which have already increased massively in price in the previous three years.

The report states that:

“Mortgage approvals, even excluding cash purchases, are in excess of the amount of new supply expected to come to the market, thus house price inflation is expected to remain strong over the forecast period. […]“While supply remains low, demand appears to be running ahead of expectations”.

Existing housing demand is said to be 30,000 per year, and it is reported that it will take another number of years in order for the number or houses built to match up to tahis demand. This lack of balance between supply and demand is what has encouraged this somewhat bleak forecast from Goodbody Stockbrokers, who have also stated that they expect there will be €13.5billion in new mortgage lending in the coming years.

An additional issue with supply and demand is that there are far more prospective homeowners being approved for mortgages than there are houses available, which continues to push prices higher. A recent infographic shows the increasing prices as they continue to grow. Mortgage approvals are being boosted by the Government’s popular help-to-buy scheme but many of those approved will find themselves without a home to buy.

Should you have any queries on home ownership, or any other financial or business matters, please don’t hesitate to contact us here at EcovisDCA, where we will as always be happy to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

WHOSE HOUSE IS IT ANYWAY?

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It comes as no surprise these days that the world of buying your first home has become an increasingly difficult one to navigate. Gone are the days of being able to finance your first home, and also have overflow cash readily available for furnishing and renovations. This year’s introduction of the new mortgage rules has made the process somewhat more difficult for both first and second time buyers to gain access to the funds required. As a result of this, the average age at which couples are buying their first homes has increased greatly in recent years.

 

With these new mortgage rules making it increasingly difficult to save for your first and then subsequent second home, the issue then becomes saving that extra bit of cash to furnish and renovate any problematic areas of your new home. Thankfully, a new Bank of Ireland mortgage initiative promises to help you with this arduous task.

 

Bank of Ireland already promise customers the lowest available 3 year fixed term rate available and 12 month approval. Now, in addition to these promises, Bank of Ireland are offering customers who are first time buyers, movers, or those interested in switching an existing mortgage to Bank of Ireland, 2% cashback on their loan.

 

While 2% may seem an insignificant number at first glance on paper, this could be of great benefit when your savings have immediately gone into the new requirements for deposits. Where there was no real wiggle room to start work on your new home, there now is an unexpected sum available at your disposal. Get thee to a DIY store!

 

To put this figure into perspective, if you are to borrow €150,000 for your new home, Bank of Ireland will then lodge€3000 into the account used for the mortgage. Bank of Ireland state that this payment will be made within 45 days from the mortgage being drawn down. Just in time to start collecting tiles for that new bathroom you would like to put in.

 

This offer applies to mortgages drawn down between 3rd June 2015 and 31st December 2015, so this is a good time to do a check on those all-important savings and hopefully make a move towards your new home.

 

Buying a home is a very expensive yet rewarding endeavour and it is a relief to see some new initiatives announced to assist people on their way. Should you require any assistance with your own savings, finances, ormortgage arrangements, please do not hesitate to contact us here at DCA Accountants.