Labour grants for first-time buyers 'will cause increase in house prices'
A Labour Party proposal to introduce cash grants for first-time home-buyers is likely to be shot down amid fears it would cause property prices to increase further.
Backbenchers have launched a new bid to introduce the incentive for young couples and are putting pressure on the party leadership.
It was discussed at Labour's parliamentary party meeting this week that was dominated by the housing crisis.
Labour TDs and senators are demanding that Environment Minister Alan Kelly provide a detailed account next week of how the €3.8bn housing budget is being spent.
"There is a sense of frustration that the money is there, but it has not been implemented yet," said Labour's Dublin North TD Brendan Ryan.
Mr Ryan heads up an internal housing committee that is putting pressure on Labour ministers to ensure the housing budget is rolled out.
For the second time in recent weeks, Labour TDs discussed the prospect of introducing a cash grant for first-time buyers.
The proposal is targeted at couples living in urban areas who cannot meet the deposit rules to obtain a mortgage.
The measures would see the minister directing local authorities to provide cash grants to applicants struggling to get on to the property ladder in cities such as Dublin, Cork, Limerick and Galway.
A similar scheme, which previously saw first-time buyers being given grants of up to £3,000, was scrapped in 2002.
Dublin Central TD Joe Costello and party chairman Jack Wall said measures are needed to help those trying to buy a home of their own.
"Young people who find it hard to get on to the property ladder need to be supported, and the role of the local authority cannot be ignored here," Mr Costello said last night.
The issue will be raised again at a special Labour parliamentary party meeting next week.
But senior government sources have voiced caution over such a move, warning against any measure that could cause house prices to escalate further.
"The property market is vulnerable and we need to be careful about measures that would have further upward impact," said a source.
Nevertheless, a Labour source said the proposal was not being ruled out entirely and could form part of a wider support package to be pledged in the Labour general election manifesto.