Dáil Éireann Debate, Thursday - 20 January 2022
216. Deputy Brendan Griffin asked the Minister for Housing, Local Government and Heritage if a decision has been made by the Central Bank on the shared equity scheme given that a decision was due in November 2021; and if he will make a statement on the matter. [2748/22]
View answerPart 4 of the Affordable Housing Act 2021 provides the basis for the establishment of the First Home Affordable Purchase Shared Equity scheme. The scheme will support first-time buyers on moderate incomes to buy a new-build home. The banking sector has confirmed it is committed to working with the State to develop and deliver this scheme. Budget 2022 allocated €44m to my Department for First Home. The banking sector has agreed in principle to match State equity funding in order to increase the pool of funding available to potential new homeowners under the scheme. Subject to the necessary approvals by all parties, it is anticipated that the First Home scheme will operate for the period 2022 to 2026 utilising overall funding of c.€400m.
The Central Bank of Ireland (CBI) addressed the First Home scheme in its Financial Stability Review II of 2021, published 25 November 2021. The CBI noted that ‘the potential financial stability implications arising through the borrower resilience channel are limited given the specific design features of the Scheme’. The CBI also noted its judgement that ‘the Scheme is more equity than debt-like in nature’ and that this ‘mitigates the risk of borrower over-indebtedness’. In light of these conclusions, the CBI confirmed that the Mortgage Measures Regulations would be amended in order to ‘remove potential ambiguity’ about the participation of regulated mortgage lenders, including the pillar retail banks, in the First Home scheme. This amendment has now made.
Officials from my Department, the Housing Agency as well as the Department of Finance have engaged closely with stakeholders including the pillar banks, the CBI and our colleagues in the European Commission to advance the First Home Scheme.
