Dáil Éireann Debate, Tuesday - 29 November 2016
282. Deputy Donnchadh Ó Laoghaire asked the Minister for Housing, Planning, Community and Local Government the schemes that exist to assist persons whose incomes are marginally above the income limits for social and affordable housing, but for whom being in a position to save for a large enough deposit under the current Central Bank mortgage rules would be impossible; and the way in which such persons could obtain secure housing. [37330/16]
View answer284. Deputy Donnchadh Ó Laoghaire asked the Minister for Housing, Planning, Community and Local Government if it is currently within the gift of local authorities to offer loans or mortgages to applicants seeking housing; if not, if his Department has considered supporting or facilitating such loans or mortgages; and if he will make a statement on the matter. [37332/16]
View answerI propose to take Questions Nos. 282 and 284 together.
The lack of a sufficient supply of homes to meet demand has led to the current pressures in the housing market, making it difficult for first-time and other buyers to access housing at affordable levels.
The Rebuilding Ireland Action Plan for Housing and Homelessness outlines the Government’s commitment to develop a fully functioning housing market that meets the housing needs of all, by overcoming the current supply shortfall and increasing the national supply level to over 25,000 new homes per year by 2021. Rebuilding Ireland takes a holistic approach in addressing the many interacting structural constraints affecting the housing market by including actions to streamline the planning system, remove infrastructure blockages and support the delivery of affordable housing. These measures should help make new developments economically viable in areas where supply constraints and price pressures are particularly acute.
Earlier this month, I announced details of 23 Major Urban Housing Development Sites with the potential to deliver up to 30,000 additional homes on existing zoned lands and close to the key areas of demand over the next 3-4 years. These sites will be highlighted as exemplars for the co-ordination and delivery of plan-led housing development and active land management.
In order to quickly get key sites moving, a €200 million Local Infrastructure Housing Activation Fund (LIHAF) has been established. Twenty-one local authorities, working in conjunction with housing providers, submitted proposals for funding which are currently being evaluated. Successful bid proposals will be announced in December.
Separately, the National Treasury Management Agency and Ireland Strategic Investment Fund are currently exploring opportunities to support the delivery of housing-related on-site enabling infrastructure in large-scale priority development areas with a view to kick starting the development process.
Given the particular challenge faced by first-time buyers in accessing the housing market, my colleague, the Minister for Finance recently announced a Help-to-Buy initiative as part of Budget 2017. The Help-to-Buy initiative has been designed to complement the structural measures announced in Rebuilding Ireland, by providing immediate and targeted support for first-time buyers of new homes in meeting their deposit requirements, greater certainty regarding the pool of available purchasers is provided to the housebuilding sector, encouraging the construction of new housing units.
The combined effect of these and other actions under the Plan will help reduce costs and deliver more housing at affordable prices, where it is most needed.
In addition, there are currently two house purchase loan offerings available to lower income first time buyers from local authorities.
The first is a standard annuity mortgage available from all local authorities. A first time buyer unable to get a loan from a building society or a bank, may be eligible for a mortgage from the local authority concerned to purchase a new or second hand property or build their own home. The loan can be up to 97% of the price of the house subject to a maximum loan of €200,000. A local authority mortgage is an annuity mortgage with variable interest rates so repayments will go up and down in line with interest rate changes. The relevant terms and conditions applying to local authority housing loans are set out in the Housing (Local Authority Loans) Regulations 2012. Key eligibility criteria provide that a loan applicant must be a first time buyer and must be able to show their local authority that they cannot get a loan from a bank or building society. Also, the gross income (before tax) of a single income household in the previous year must be €50,000 or less and the combined gross income (before tax) of a two income household in the previous year must be €75,000 or less. Prospective applicants should contact their relevant local authority for further information.
The second option is the Home Choice Loan, a Government backed mortgage for first time buyers. The relevant terms and conditions applying to the Home Choice Loan are set out in the Housing (Home Choice Loan) Regulations 2009. First time buyers can apply for a Home Choice Loan to purchase a new or second hand property or build their own home. Home Choice Loan provides up to 92% of the market value of a property purchased, subject to a maximum loan amount of €285,000. The loan is a normal capital and interest bearing mortgage which is repaid on a monthly basis. Home Choice Loan offers one variable interest rate. The rate is currently set at 3.25% variable, APR 3.30%. Further information is available at http://www.homechoiceloan.ie.
To support local authorities in operating their housing loan schemes in a consistent and efficient manner, the Housing Agency provides a central underwriting service to local authorities. The credit underwriting process considers the impact that family circumstances may have on the loan applicant’s capacity to make loan repayments. The final decision on loan approval is a matter for the relevant local authority and its credit committee on a case-by-case basis and in accordance with the relevant statutory Credit Policy that underpins the scheme and aims to ensure prudent lending.
