Scrap home loan scheme - FG

Fine Gael has called for a controversial loan scheme aimed at first time buyers to be scrapped, decribing it as a "PR stunt".

Under the Home Choice Loan scheme, the Government gives 92 per cent of the purchase price of a newly-built house to a first-time buyer, provided they earn more than €40,000 a year. They must also have failed to secure finance through the normal routes.

However, Fine Gael housing spokesman Terence Flanagan said today there had been no loans drawn down on the scheme as yet, and called for it to be abandoned.

"According to the Minister, 1,400 people have registered an interest, 33 people have applied for the scheme, two people have been approved yet no loans have been drawndown," he said.

"It is clear that the scheme was nothing more than a 'PR stunt' rather than a meaningful scheme. If it were a serious plan, there would be more than two prospective homeowners receiving approval."

The scheme came under criticism earlier this year when it emerged that administering the scheme has cost close to €300,000. Minister of State for Housing Michael Finneran was forced to defend the scheme, which he said was "never about incentivising house purchase, merely facilitating it".

Accusations have also been levelled that the only people to benefit from the scheme will be developers.

"While initiatives to help first-time buyers into the property market are welcome, this scheme was unsuitable and was designed to benefit developers," Mr Flanagan said today.

"It should never have been introduced and it is clear now that it must be abandoned."