Finance Spokesperson Pearse Doherty TD said the Governor of the Central Bank, Philip Lane, has confirmed to him in a letter that the bank was only consulted on whether it would accept any rebate in meeting the deposit requirement.
Deputy Doherty said: "The Governor in his letter repeats the criticism of any such scheme stating 'If there is an insufficient supply side response, raising demand in a given segment of the housing market will just tend to put upward pressure on prices, with the sellers of properties effectively gaining more than the recipients of the subsidy'.
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"The refusal to discuss the merits of the scheme with the Central Bank flies in the face of the Programme for Government commitment to 'work with the Irish banks, the European Investment Bank, industry bodies, the Central Bank and the Irish Strategic Investment Fund to develop a new 'Help to Build' funding scheme for the development of affordable housing in the private sector'. Clearly, the government have simply decided not to ask the Central Bank about the effects of its proposal. The 'Help to Buy' scheme has quite rightly been attacked by almost all commentators with any knowledge of the issue.
"I will be proposing a deletion of this scheme from the Finance Bill this week. It is completely unacceptable that any political party who believe that this scheme could push up house prices would consider abstaining on this issue and thereby allowing it to pass into law; all the evidence points to the scheme increasing house prices, increasing debt on young families and increasing profits for builders."
(CD/LM)
