Seán Sherlock
Question:602. Deputy Sean Sherlock asked the Minister for Housing, Local Government and Heritage if he will address a matter in relation to the shared equity scheme (details supplied). [31183/21]
View answerTuesday, 15 June 2021
Questions (602)
Written answers
The Affordable Housing Bill 2021, currently before the Oireachtas, provides for three schemes delivering on the Programme for Government commitment to put affordability at the heart of the housing system and prioritise the increased supply of affordable homes through (1) affordable homes on local authority lands, (2) the introduction of a new form of tenure in Cost Rental, and (3) a new affordable purchase shared equity scheme.
Affordable homes on local authority lands are to be made available through the support of the €310 million Serviced Sites Fund (SSF). Information on the schemes, including those that have been approved in Cork City and County, that have received approval in principle under the Serviced Sites Fund are available at:
www.rebuildingireland.ie/news/minister-murphy-gives-the-go-ahead-for-ten-local-authority-sites-for-affordable-housing-under-the-serviced-sites-fund/ , and
www.rebuildingireland.ie/news/minister-murphy-approves-funding-of-e84m-to-support-delivery-of-1770-affordable-homes-under-the-ssf/ .
My Department continues to engage with local authorities to progress both current and potential projects, with the first SSF project to deliver affordable homes for purchase later this year being the Boherboy project in Cork City.
These homes will come with an initial price of between 10% and 40% below market price, with the discount provided remaining as a fully-repayable equity charge against the property. The scheme is targeted at first-time buyers, with some limited exceptions as outlined in the Affordable Housing Bill 2021. Applications for affordable housing on local authority lands, supported by the Serviced Sites Fund, will be made through the local authorities.
In addition to the affordable homes to be delivered by local authorities, Budget 2021 allocated €75 million for the Affordable Purchase Shared Equity Scheme, which is aimed at first-time buyers buying a new-build home on private land. It will help first-time buyers secure their own home by providing up to 20% equity support to bridge the gap between the mortgage available to them and the price of the home they want. This would seem to be the specific scheme referred to in the question.
The Affordable Housing Bill will provide a basis for the establishment of the scheme which it is anticipated will be operated and administered by a newly established a special purpose vehicle (SPV). The Bill also provides that the Minister may agree the terms by which the equity support may be provided in a memorandum of agreement with the SPV covering, inter alia, areas such as purchaser eligibility and financial means, the homes that may be considered eligible under the scheme, and the amount of funding that can be provided.
Determining the price caps for the Affordable Purchase Shared Equity Scheme requires balancing the accessibility of the scheme for eligible purchasers, mitigating against potential inflationary pressure and ensuring that a range of homes can be supplied across key locations. Working price caps envisaged for the equity scheme are detailed below, and are informed by the CSO recorded median prices of new First Time Buyer homes sold by area. The equity scheme, therefore, targets homes in the lower half of recorded sales prices over the previous year. The proposed caps will be reviewed and finalised in advance of the scheme’s deployment, and will be kept under review thereafter.
|
Price Cap (€) |
Location/Local Authority Area |
|
Price Cap (€) |
Location/Local Authority Area |
|
450,000 |
Dublin City, Dún Laoghaire Rathdown |
|
400,000 |
Fingal, Cork City, Galway City, South Dublin, Wicklow |
|
350,000 |
Cork County, Galway County, Kildare, Limerick City and County, Meath |
|
300,000 |
Clare, Westmeath, Wexford |
|
275,000 |
Carlow, Louth, Offaly |
|
250,000 |
Kerry, Kilkenny, Laois, Roscommon, Waterford |
|
225,000 |
Cavan, Donegal, Leitrim, Longford, Mayo, Monaghan, Sligo, Tipperary |
|
Additional price caps for apartments |
|
|
500,000 |
Dublin City, Dún Laoghaire Rathdown |
|
450,000 |
Fingal, Cork City, South Dublin |
Required regulations for the shared equity scheme will be made following the passage of the Bill through the Oireachtas, and it is anticipated that the earliest deployment of this scheme will be later in 2021. The shared equity scheme will be managed nationally, with applications to be made via the aforementioned SPV, regardless of location.
Other affordability measures, such as the Help to Buy Scheme, and the Rebuilding Ireland Home Loan, are already available to eligible purchasers nationally to make home ownership more affordable.
The Help to Buy Scheme may return tax paid in the previous four years to eligible first-time buyers, up to a maximum amount of €30,000, for a new home. Information is available at: www.revenue.ie/en/property/help-to-buy-incentive/index.aspx .
The Rebuilding Ireland Home Loan enables credit worthy first time buyers to access sustainable mortgage lending to purchase new or second-hand properties in a suitable price range. 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. Further information on the Rebuilding Ireland Home Loan is available at www.rebuildingirelandhomeloan.ie/ .