An independent impact assessment into the new Help-to-Buy scheme for first-time buyers has been commissioned by the Government.

Minister for Finanace Michael Noonan told the Dáil that a report into the scheme will be completed by next September ahead of Budget 2018.

The new scheme was criticised by Opposition parties when it was announced in the recent Budget. 

Central Bank eases deposit rules for first-time buyers

Earlier, Sinn Féin's finance spokesperson said twice as many mortgages have been approved by Irish banks since March compared to the number of mortgages that have actually been drawn down.

Speaking during the report stage debate on the Finance Bill, Pearse Doherty claimed the reason for fewer mortgages being drawn down is lack of housing supply.

He was critical of the Government's Help-to-Buy scheme, for first-time buyers of new homes and argued that it should not go ahead.

On the issue of exemptions to the Central Bank's mortgage lending rules, Mr Doherty said, "Of the 15% exemptions in mortgage lending, only one-third of that is going to first time buyers.

"So if you want to support first-time buyers to get onto the property market then what we should be doing is encouraging the Central Bank to introduce tweaks, which would mean that the 15% exemptions would not be for people buying their second, third or fourth home.

"It would be actually focused on people who want to get onto the property market. At the minute it is 15% and you don't care how that is divvied up", he said.

"What we have heard from the banks that have been before the committee so far is that one third of the exemptions are going to first time buyers and two-third are going to non-first time buyers."

"This scheme is wrong. Given that the Central Bank is coming in with what is reported to tweaks to the macro-prudential rules and it is reported that what they will do is increase the exemptions from 15-20%.

Independent TD Stephen Donnelly said the Help-to-Buy Scheme is meant to be a targeted intervention to help first time buyers but it has completely excluded the negative equity generation.

He said that if you are stuck in negative equity and trying to buy a new house the Budget has done nothing for you.

Minister Noonan said: "The Help-to-Buy incentive is an important element of Government policy in relation to housing." 

He said it should be considered a tool to compliment the other measures in the Housing Action Plan.

The Minister added: "I could not come up with a construct to help people in negative equity who are renting out their apartment and renting a larger place for themselves."