Ireland has increased the maximum support available to first-time buyers under its Help to Buy scheme to €35,000, as the UK government prepares to unveil its own new homeownership scheme.

The €5,000 increase was announced as part of Ireland’s 2027 Budget and is intended to increase the purchasing power of first-time buyers purchasing or building new homes.

It comes just weeks before the UK government is due to confirm details of its Your First Home scheme at the Budget.

The UK scheme is expected to allow eligible first-time buyers in England to purchase a new-build home with a deposit of 2.5%, supported by a government-backed equity loan of 20%.

DIFFERENT APPROACH

While both schemes target the deposit barrier and new-build market, they operate differently.

Ireland’s Help to Buy scheme provides eligible first-time buyers with a refund of income tax and Deposit Interest Retention Tax paid over previous years towards the deposit on a new home or self-build.

Your First Home will instead use an equity loan, with the government taking an equity stake alongside the buyer’s mortgage.

The government has said the UK scheme will include household income and local property price caps, while participating developers will also be expected to contribute towards its costs. Further details, including implementation timescales, are due at the Budget.

MORTGAGE MARKET

The introduction of Your First Home could have implications for lenders and brokers serving first-time buyers, particularly around the availability of mortgages compatible with the equity loan structure.

England’s previous Help to Buy Equity Loan scheme closed to new applications in 2022, with purchases required to complete by March 2023. Existing borrowers continue to manage and repay their equity loans.

The new scheme is also intended to stimulate demand for new-build properties and support housing supply.

Marcus Ryan, chief executive officer at residential property investor and developer Lioncor, said Ireland’s decision demonstrates the potential link between buyer support and development.

He added: “If we are serious about increasing supply, we need policies that give developers and investors confidence to commit capital and bring more schemes forward.

“This measure helps create that confidence by strengthening the market for new homes and supporting the case for continued investment in Irish residential.”