Coleiro Preca criticises suspension of home equity scheme

Marie Louise Coleiro Preca yesterday criticised the government's decision to suspend the home equity scheme for first-time buyers.

The Labour leadership hopeful said the suspension of the scheme, without offering alternatives, was not mentioned in the Nationalist Party's electoral manifesto and neither in the President's speech at the opening of Parliament.

The scheme was launched a couple of years ago and aimed at first-time buyers who wished to purchase their property from the private market. In cases where the price of a property could not be met through a bank loan, the Housing Authority used to cover the shortfall between the sum that could be borrowed and the property price.

The Sunday Times reported that according to sources, the government had forked out some €3.68 million (Lm1.6 million) between October and April on the scheme which proved to be a major hit with home buyers, but a spokesman for the Social Policy Ministry said the scheme was being "restructured" and details would be given in due course.

Last week applicants received a letter saying that all applications made after April 24 were on hold.

Ms Coleiro Preca said that halting the scheme was a slap in the face for young people who were hoping to buy a property, adding that local rent prices were too high to make them feasible.

She said the population census should have made the government aware that prices of property and rent were creating socio-economic difficulties for many couples and families.

Ms Coleiro Preca said other Housing Authority schemes had fallen back with many people waiting for answers or steps to be taken to repair their houses.

The Social Policy Ministry said the Housing Authority will be restructuring its Equity Sharing Scheme, ensuring it is sustainable for young couples purchasing their first home.

Applications being processed will be retained until the restructuring process is completed, it said.