New research has revealed house price inflation has not been caused by the Help to Buy scheme.

The Construction Industry Federation (CIF) states while critics attribute rising house prices to the scheme, these increases are happening in the second-hand home market, an area the Help to Buy initiative is not involved in.

The scheme was introduced in Budget 2017 to increase the housing stock and consists of a payment in the form of tax-back that makes it easier for first-time buyers to secure a mortgage on a new home or self-build project.

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CIF Director Tom Parlon said the scheme has actually been good to builders, creating a viable market for first time buyers, and resulted in a six fold return for the exchequer.

"The house price inflation that we are seeing, is happening in the vast majority of cases, in the second-hand home market- a market that those availing of the Help To Buy Scheme are not involved in," he said.

"These house price increases are driven by scarcity in second hand home market, which accounts for 90 per cent of transactions according to a recent report by Daft.ie.

"If the price of a new home is €250,000, it will cost the government €15,000 or so under the Help to Buy Scheme and yield €100,000 in direct and indirect revenue.

"The Help To Buy scheme has been a significant contributor to the growth in residential construction activity. Any suggestion of a withdrawal of this scheme could have a detrimental impact on confidence and the ability of house builders to maintain and increase their residential building programmes."

(LM/MH)