STRONG interest has been registered in the new scheme that sees the State taking equity in homes.

It is for those whose income is too low to get them a big enough mortgage to purchase their first home. Some 508 buyers have been approved for the shared equity First Home scheme since in it was launched in the summer, with close to 2,000 more people registering an interest in the scheme. Most of the successful applicants have bought homes in Dublin, and in the commuter belt of Kildare, Meath and Wicklow. The average purchase price is €359,000, while the average First Home support is €79,000, according to the First Home entity set up to manage the scheme.

The landmark affordable housing scheme was rolled out in July, with €400m in funding. The three main banks have signed up to the scheme which will see the State providing an interest-free stake of up to 30pc in the home. Figures just released show that 508 buyers in 23 counties have been approved for the scheme and have received eligibility certificates which will allow them to purchase their chosen home.

A joint application is counted as one buyer, not two. Another 203 applications are currently being processed, with approvals expected to issue shortly in most of these cases, First Home’s chief executive Michael Broderick said. He said a total of 1,862 potential buyers have registered their interest in the scheme. This is made up of 823 individual buyers and 1,039 couples. The average purchase price for eligibility certs is €359,000, while the average support being provided by First Home in these cases is €79,000. Under the scheme, the purchase of new-build homes is to be jointly funded by the State and participating mortgage lenders.

There are limits on the value of properties that will qualify for the scheme in each local authority area. The limits will be based on the median value for a new home in the area. Mr Broderick said First Home will complete a review of the price cap for homes that qualify for the scheme in each local authority area, with the outcome expected in January. This measure is to prevent distortion in each local housing market. Housing Minister Darragh O’Brien said he was encouraged by the interest and the take-up of the scheme in its first 12 weeks of existence.

“We are now seeing people buy and move into their new home as a result of the First Home Scheme and we will see thousands more over the coming years.”

Mr Broderick said: “It is early days, but we are off to a good start and first-time buyers are responding very favourably to what we offer, with close to 2,000 registrations of interest and over 500 eligibility certificates issued already.”

The scheme is aimed at the squeezed middle, who are caught paying sky-high rents, which makes it difficult to raise a deposit. These people are earning too much to qualify for social housing, but too little to qualify for a mortgage in a property market with surging prices. Typical beneficiaries of the scheme would be a couple with an income of €70,000, who want to buy a €320,000 new home. After putting up a 10pc deposit, the most they can borrow is €277,000. This leaves a gap of €43,000.

First Home would provide this amount as equity, with no interest for the first five years. This couple could also benefit from the State’s Help-To-Buy scheme, which usually provides tax relief of up to 20pc of the property’s value. This week the Central Bank said that first-time buyers will be able to borrow up to four times their income from next year in a slightly relaxation of its mortgage lending rules.

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