Home equity scheme halted

Young couples are incensed after the government abruptly stopped its equity sharing scheme for first- time home buyers.

The scheme has proved to be a major hit with home buyers, with sources saying that the government had forked out €3.68 million (Lm1.6 million) between October and April.

A spokesman for the Social Policy Ministry said that the scheme was being "restructured" and details will be given in due course.

That is little comfort for the many couples who were banking on help from the Housing Authority. Applicants received a letter on Friday saying that all applications made after April 24 were on hold.

"At present the Housing Authority is unable to process your request for application under this scheme. However, the authority will keep a record of your details so that in the future we can inform you of the conditions of the new scheme," the letter stated.

Launched early in 2006, the scheme was aimed at first-time buyers who wish to purchase their property from the private market.

In cases where the price of a property cannot be met through a bank loan, the authority used to cover the shortfall between the sum that can be borrowed and the property price.

To ease the burden, the beneficiaries were not obliged to repay their loan until after 10 years from the date of sale of contract. After this period it would have been assessed whether the applicant was in a position to make the repayment or take an additional loan.

The Housing Authority already assists potential home owners through the shared ownership initiative for those with a low income.

One applicant who called The Sunday Times yesterday said the sudden termination of the scheme meant couples may now be left with promises of sale contracts they would have to revoke.

The young applicant, who did not wish to be named, said: "I am shocked. All throughout their campaign we were hearing how the Nationalists want to help young people by giving them the opportunity to purchase housing through schemes.

"After the election, we started looking for a place and consulted the Housing Authority on what we needed to do. We were advised to have a place in mind when we submitted our application... We paid the application fee, and were told that we would be sent a letter in three weeks telling us how much of the loan we would be receiving."

The applicant even called the authority on May 11, and was told that he would be receiving a letter as early next week indicating the loan figure he was entitled to.

"I am sitting here with a preliminary agreement in one hand, and a letter from the authority in the other. Now I have to contact the owner, like a fool, and say that I have to cancel the sale," he said.