A number of measures in the budget are to encourage investors back to the housing market.

The Minister for Housing and Local Government Noel Dempsey TD announced a number of measures on stamp duty and interest relief to encourage investors back into the housing market. The initiatives were welcomed by The Construction Industry Federation. Threshold, which represents tenants in the rented sector, described the budget as a U-turn which would have disastrous consequences for would be first time buyers and for tenants in poor quality accommodation.

Three years ago, the government backed measures to get investors out of the housing market so that ordinary buyers could afford to buy.

Following the introduction of measures to get investors out of the housing market, the supply of rental properties dropped and rental prices soared. The minister has today invited those investors back into the housing market with a number of budgetary measures. Stamp Duty for investors has been restored to the same level as for owner occupiers. The minister also restored interest relief as a deductible expense in calculating tax on residential rental income. Furthermore, the minister is extending the deadlines for property investment projects under the urban and rural renewal scheme.

Kieran Murphy, Director of Threshold, said that house prices will escalate again with the return of investors to the market. First-time buyers will now be competing with investors.

The Construction Industry Federation (CIF) welcomed the provisions on stamp duty and interest relief but are disappointed that nothing has been done to help first-time buyers.

Ciaran Ryan, CIF, says that their proposal for a £10,000 tax credit would have benefited first-time buyers.

The minister also expressed his commitment to investment in infrastructure and the National Development Plan. He has added an additional €550 million for various projects including €146 million on social housing.

An RTÉ News report broadcast on 5 December 2001. The reporter is Ingrid Miley.