The head of the Central Bank has hit out at the government's scheme for first-time buyers - saying it could end up serving only as a subsidy for builders.

Governor Philip Lane says that unless there's a big increase in the number of new builds, the scheme will benefit builders more than borrowers.

He also says the scheme runs the risk of helping households that didn't need assistance to pull together the deposit for a home.

The comments were made in a letter to Sinn Féin's Pearse Doherty, who says the failure to consult with the bank is a breach of the Programme for Government.

Central Bank raises concerns that first time buyer scheme will push up house prices with greatest benefit going to Builder over the buyer

— Pearse Doherty (@PearseDoherty) October 24, 2016

“The refusal to discuss the merits of the scheme with the Central Bank flies in the face of the Programme for Government commitment to ‘work with the Irish banks, the European Investment Bank, industry bodies, the Central Bank and the Irish Strategic Investment Fund to develop a new ‘Help to Build’ funding scheme for the development of affordable housing in the private sector’," Doherty said in a statement this afternoon.

"Clearly, the government have simply decided not to ask the Central Bank about the effects of its proposal. The ‘Help to Buy’ scheme has quite rightly been attacked by almost all commentators with any knowledge of the issue."