Rather than give first-time buyers a €1,000-a-year grant for 10 years, the government should subsidise home loan interest payments, the Nationalist Party has proposed.

The proposal seeks to discourage sellers from increasing property prices to absorb the subsidy provided by the government – something the PN believes recent statistics prove is happening.

On Monday, the National Statistics Office said that property prices rose by 6.6 per cent in the first three months of the year, with apartments rising the fastest in price. The 6.6 per cent figure was a marginally lower rate of increase than in the same period last year, but a higher rate than was registered at any point in 2018 to 2021.

“Unfortunately, the Labour Party’s lack of planning ended up hurting couples buying their first house,” the PN said. “We had been warning that the aid scheme would lead to inflated property prices, and after announcing the plan with much pomp, Robert Abela himself urged sellers not to raise prices.”

The aid scheme, which was announced during the Budget speech last November, provides first-time property buyers with a €1,000 grant every year for 10 years.

The PN believes that the scheme should be tweaked to make that financial aid applicable to home loan interest payments, thereby reducing the incentive sellers have to inflate their property prices.

“A PN government had introduced a scheme offering VAT refunds on works carried out by first-time property buyers,” PN MPs Albert Buttigieg and Ivan Bartolo said. “The scheme was a success. On the other hand, Robert Abela should focus on truly helping property buyers, instead of just trying to look good.”