Michael Lowry (Tipperary North, Independent)
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Question 272: To ask the Minister for the Environment, Heritage and Local Government his views on reintroducing the first-time buyers grant to assist young people purchasing their first home; the annual estimated cost of such a proposal; and if he will make a statement on the matter. [39748/06]

Noel Ahern (Dublin North West, Fianna Fail)
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The new house grant scheme was terminated in 2003 to concentrate housing programmes on areas of greatest impact and social need. It is not proposed to reintroduce the grant. However, through overall increases in supply, and increasing output under various affordable housing initiatives, the Government are seeking to improve access to home ownership for first time buyers. These targeted measures, in particular, assist low income purchasers.

This is a better means of improving the affordability of house purchase and using available resources effectively, than a general first time buyer grant which would over time become absorbed into the house price. Other general measures are in place through the tax system to assist first time buyers, such as stamp duty concessions and mortgage interest relief.

There is evidence of strong activity at present by first time buyers in the market. It is estimated that 45% of new house loans in 2005 were taken out by first time buyers. In addition, the average age of Irish first time buyers in 2005 was 30. Over half of these purchasers were aged 29 or under. This compares with a corresponding average age in the United Kingdom of 34.

In 2002, prior to termination of the grant, it is estimated there were 33,000 first time buyers; however only 10,500 or about 1/3 of those drew down the grant. If the scheme was reintroduced at this stage it is likely, assuming a similar ratio of first time buyers qualify that the annual cost would be in the order of close to €40 million.

The Government will continue to prioritise effective action to maintain current high levels of supply in the housing market and in particular, will accelerate measures to assist those who cannot access affordable housing without assistance.