The Government's help-to-buy scheme to assist first-time house buyers has been strongly criticised by Fianna Fáil.

Party housing spokesman Barry Cowen told the Dáil the Government was firing the starting gun on a new property price race. Overall, he said, the €20,000 grant would see more money chasing the same few homes.

“Builders will simply boost prices to get higher profits they need or the banks they have borrowed off demand,’’ he said.

“The cost of building a new home will remain fundamentally unaddressed.’’

He said a young couple would find themselves using the grant just to try to outbid other couples armed with the same amount looking at the same house.

‘Blank cheque’

Earlier, Mr Cowen’s party colleague

Darragh

O’Brien said the measure would do nothing other than push up prices further, saying it was a “help-to-sell scheme’’.

He said the supply issue had not been addressed.

“Why would a builder or developer, who is currently selling houses at €400,000 not increase those prices up further? The Government has given him a blank cheque, effectively,” he said.

Mr O’Brien said the rental market in Dublin and across the country was up to 2007 levels. He said renting a two-bedroom apartment in Dublin could cost €1,750 monthly.

“Yet this Government expects people to be able to save a 20 per cent deposit to buy a house. To get on the property ladder is practically impossible,” he said.

Minister for Education Richard Bruton, who was taking Leaders' Questions, said the Government recognised there was a housing supply problem. There were very few starter homes being built.

Tax rebate

He said Minister for Housing

Simon Coveney

had made provision for first-time buyers to get a tax rebate of up to €20,000 which would be immediately reckonable towards a deposit.

“This will immediately help more young people to get into the starter market,’’ he said.

Mr Bruton said many builders could not afford to provide the top-up funding needed to get starter homes. Large estates of 100 houses or more were not being built, he said.

Sinn Féin’s Peadar Tóibín said that introducing €20,000 grants for individuals purchasing €600,000 starter homes, while 6,000 other people languished in emergency accommodation for months on end around the State was brutally inequitable.

"The Labour Party targeted Ashbourne Annie before the election,'' Mr Tóibín said. "It seems to me that Fine Gael's target fictional voter is Rathgar's Ross O'Carroll-Kelly.''