In response to the government’s decision to bring forward the budget in an effort to tackle the current economic situation, the Irish Auctioneers and Valuers Institute, which represents around 2,000 qualified real estate professionals nationwide, agrees that strong measures to reinvigorate the economy are required.

Mr Edward Carey, President of the IAVI said “Although we believe it is unlikely that the government can make the cost of buying houses any cheaper, we strongly encourage it to ensure that any budgetary measures apply to new and second hand homes, as both sectors have a role to play in boosting confidence, finance and mobility.”

“To those who are currently considering a house purchase we say if you can get a mortgage go ahead and buy in advance of the budget as now may be the optimum time to buy. “There is no doubt but that any measures introduced may cause a short sharp increase the demand on housing, and may boost, the number of individuals capable of buying the available stock after Budget day. There is clearly an advantage in buying in the intervening period before the level of competition increases, perhaps dramatically,” he said.

Commenting on speculation that the government might consider providing fiscal assistance, possibly in the form of a possible VAT rebate, Mr Carey called on the government to commit to back-dating any fiscal benefit package to ensure that buyers prepared to commit themselves now would not find themselves at a financial disadvantage come mid October. “The last thing a weak market needs is total stagnation for six weeks pending the Budget and Government must protect jobs by ensuring that this does not happen”, said Carey.

It is reported that the government intends to concentrate on first-time buyers, including ensuring easier access to mortgage finance, which is particularly restrictive at present, and a possible restructuring of the shared ownership scheme. The IAVI believe these are crucial measures that are likely to invigorate the whole market, as more buyers in the lower sector of the market would permit others to trade up.

“We believe that a simplified shared ownership scheme would help bridge the affordability gap. The government could also stimulate confidence by taking an equity share in these properties. It is a win-win scenario where the buyer only finances the majority of the purchase price, rather than 100% and the exchequer realises its equity as the houses are sold on in the future.”

The IAVI endorses the call by the Construction Industry Federation that the Housing Finance Agency’s role should be expanded to help first time buyers keen to become homeowners.

“In a drastic change from recent years, when many lenders had over-generous policies, potential borrowers are now curtailed by conservative loan criteria, which vary from urban to rural areas. The HFA could play a major role in improving this situation and it should be directed to ensure liquidity for potential borrowers. Mortgage loans underwritten by the State, whether provided directly or through other bodies, would have a major impact on the lending market,” he said.

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Media contact: Carina O’Neill, Bracken Public Relations 01-677 3277/087 222 8124