Dáil Éireann Debate, Tuesday - 14 July 2020
447. Deputy Emer Higgins asked the Minister for Housing, Planning and Local Government the supports available to renters unable to acquire a mortgage to purchase a home; his plans to provide further supports; and if he will make a statement on the matter. [16115/20]
View answerMy Department operates the Rebuilding Ireland Home Loan, which is targeted at first time buyers who wish to own their own home, have access to an adequate deposit and have the capacity to repay a mortgage, but who are unable to access a mortgage sufficient for them to purchase their first home. As part of the eligibility criteria applicant(s) of the Rebuilding Ireland Home Loan must have received insufficient offers of finance from two mortgage lenders to apply for a Rebuilding Ireland Home Loan. The loan enables credit worthy first time buyers to access sustainable mortgage lending to purchase new or second-hand properties in a suitable price range.
Single applicants for the loan must not be earning greater than €50,000 gross per annum. The combined income of joint applicants must not be greater than €75,000 per annum. There are no set minimum income limits; however, applicants do need to have sufficient borrowing and repayment capacity and must be capable of repaying the mortgage in accordance with the statutory credit policy underpinning the loan. With a Rebuilding Ireland Home Loan, applicants can borrow up to 90% of the market value of a residential property. There is also a cap on the maximum value of the property that can be purchased under the scheme. In the greater Dublin area, Cork, and Galway, the maximum market value is €320,000. In the rest of the country, this limit is €250,000.
The availability of the Help To Buy Scheme for first-time-buyers, which is a policy of the Department of Finance, offers additional assistance to purchasers of newly built properties. Up to 5% of the purchase price of properties below €400,000 could be available, which represents a significant contribution towards these deposit requirements. This should alleviate some of the challenges faced by first-time buyers in accessing the 10% deposit of the market value of the property. The initiative has been designed to provide immediate and targeted support for first-time buyers in meeting their deposit requirements and encouraging the construction of new housing units. Further information on this scheme is available on www.revenue.ie.
More generally, there are other proposals to support renters.
As confirmed in the Programme for Government 'Our Shared Future', this Government is committed to the introduction of Cost Rental housing in Ireland. This recognises that renters in Dublin and other major urban centres are facing significant housing access and affordability challenges. Cost Rental is a fundamentally different housing proposal and represents a new tenure option. It is defined as housing where the rents charged cover the cost of delivering, managing, and maintaining the homes only.
Initial work on Cost Rental is underway and in 2019 an inter-departmental multi-agency Cost Rental Working Group was convened in order to assess methods for the consistent and sustainable delivery Cost Rental at scale. This work will be assisted by a recently initiated research consultancy sponsored by the European Investment Bank on behalf of my Department. The EIB has extensive experience in supporting the delivery of affordable housing across Europe. The final Report is scheduled for completion in December.
The first Cost Rental pilot development in Ireland is currently under construction at Enniskerry Road, Stepaside, Dún Laoghaire-Rathdown. The mixed-tenure development comprises 50 Cost Rental homes alongside 105 social housing homes. The cost-covering rent for a two-bedroom apartment is projected to be €1,200 per month, which represents a significant discount on equivalent market prices in the area. Construction began in July 2019 with delivery scheduled for Q3 2021 (pre-Covid).
Two other Cost Rental projects are also under development, at Emmet Road, Inchicore (the former St Michael’s Estate), and at Shanganagh Castle, Shankill, Dún Laoghaire-Rathdown. At the former site, Dublin City Council are proposing to construct 375 Cost Rental units alongside 109 social housing units, and they have recently appointed an architect-led integrated design team to progress the project through the planning and construction phases. At Shanganagh, Dún Laoghaire-Rathdown County Council is working in partnership with the Land Development Agency to develop approximately 300 Cost Rental homes alongside approximately 200 social housing homes and 100 homes for sale under the Affordable Purchase scheme. A planning proposal was lodged with An Bord Pleanála in January 2020.
The selection of further sites for cost rental consideration will be informed by emerging policy and by the financial and operational model that will develop from the evidence building that is currently underway. In the long term, the intention is that the development of a Cost Rental model will significantly enhance affordability for moderate-income earners within the rental housing sector.
