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No salary cap for first-time buyers in new affordable housing scheme

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Under the scheme, a percentage of the cost will be paid

Under the scheme, a percentage of the cost will be paid

Under the scheme, a percentage of the cost will be paid

A new affordable housing scheme aimed at young professionals will impose no salary cap on those availing of State support to buy their first home.

Under the scheme, a percentage of the cost of a new home will be paid for by the Government, which can then be bought back by the homeowner.

They will not be required to pay back the State's stake until five years after they bought the home.

It has yet to be decided if homeowners will have to pay interest when buying out the State's part of the house - a source said it will be either "low or no interest".

However, unlike other housing initiatives, there will be no limit on how much someone who avails of the scheme can earn, so as to give young professionals the opportunity to buy their first home.

To apply for the scheme, a couple or individual must draw down the full mortgage they are permitted to avail of under the Central Bank's rules, which means they can borrow three-and-a-half times their salary.

A couple earning €75,000 who are seeking to buy a house worth €350,000 are able to get a mortgage of €262,000 after paying a deposit of €35,000.

Under the scheme the State may pay the remaining €53,000, which would have to be repaid by the homeowner.

Surge

It comes as a Daft.ie housing market report showed prices were unchanged in July but rents rose, even though there was a surge in properties coming on to the market.

There was a 41pc rise in the number of properties to rent.

The increased rental supply is in Dublin, and is put down to young people returning to their parents' homes, fewer Airbnb lets and fewer people moving to the city to take up new jobs.

Dublin rental costs were largely unchanged despite greater rental availability.

In the capital the rental stock on the market is almost twice what it was a year ago - elsewhere in the country availability is largely unchanged.

Larger numbers of properties to let might have been expected to lead to price falls, but the rental moratorium is likely to have stopped rental costs dropping, Daft.ie said.

In the rest of Leinster and in Munster, rental costs have risen in the last year, according to the latest Daft.ie report.

The average listed sale price nationwide in July was €259,733, while the average monthly listed rent was €1,412.

The property website reported its best day ever for traffic last Monday, with more than 560,000 sessions recorded.

Daft.ie found that the asking prices for properties across the State were unchanged in July, despite a sharp drop in the numbers of houses and apartments for sale.

In Dublin asking prices were up by 1.2pc to around €379,000.Leinster saw prices rise by 2.1pc to an average of €241,000.

Unchanged

In both Munster and Connacht-Ulster prices fell. The average in Munster is now €212,000, while it is €177,000 in Connacht-Ulster, Daft.ie said.

The unchanged level of prices across the State was despite a 22pc fall in the number of properties for sale.

This might have been expected to mean a rise in prices, but the pandemic means fewer people qualify for a mortgage.

The average cost of renting across the State is now €1,412, up 1.2pc in the year to July.