Dáil Éireann Debate, Thursday - 4 November 2004
1 Mr. O’Dowd asked the Minister for the Environment, Heritage and Local Government the new initiatives he intends to take to improve access to social and affordable housing in order to assist first-time buyers gain access to the housing market; and if he will make a statement on the matter. [27702/04]
Amharc ar fhreagra2 Mr. Gilmore asked the Minister for the Environment, Heritage and Local Government the number of private homes built in the State since the enactment of the Planning and Development Act 2000; the number of social housing units and affordable houses acquired to date by local authorities under Part V of the Planning and Development Act 2000; and if he will make a statement on the matter. [27606/04]
Amharc ar fhreagra
I propose to take Questions Nos. 1 and 2 together.
Access to affordable housing for first-time buyers is an important objective of Government housing policy and we will continue to monitor and review housing developments and policies, as necessary, to achieve this aim. Our policy has been to make housing supply more responsive to demand and to moderate house price increases and improve affordability and access to housing, particularly for first-time buyers.
It is evident that the measures introduced by this Government to boost supply are having an affect. This year is likely to be the tenth year of record overall house completions with approximately 80,000 completions forecast. Between 2001 and June 2004, a total of 195,935 houses were completed. This increased supply supported by Government measures means the market is supplying houses in many areas at affordable prices. Furthermore, survey data available to the Department indicate that first-time buyers are active in this market with approximately 43% of new houses purchased by this group.
In addition to measures to support a market response to the unprecedented demand, the Government has placed an emphasis on the delivery of targeted schemes of affordable housing. These include the shared ownership scheme and 1999 affordable housing scheme and, more recently, schemes introduced under Part V of the Planning and Development Acts 2000 to 2002 and Sustaining Progress.
Part V, which deals with housing supply, came into force on 1 November 2000. It was amended in December 2002 to ensure increased delivery of affordable housing in a more efficient and effective way. The legislation provided for the preparation by planning authorities of housing strategies by 1 August 2001 and the incorporation of these strategies into development plans by way of a variation before the social and affordable requirement could be applied to relevant residential planning permission applications. As a result, it was early 2002 before Part V was fully operational countrywide.
Between 2002 and June 2004, a total of 209 affordable units and 106 social units were acquired by local authorities under Part V agreements with developers. The provision of Part V housing units is dependent on the level and commencement of private sector residential development and the nature of Part V agreements.
Substantial progress also continues to be made on the affordable housing initiative under the Sustaining Progress agreement. Part V affordable units are an important contribution to the initiative. More than 50 projects on State and local authority lands are planned at this stage which, together with 2,100 affordable Part V units, will deliver a total of approximately 8,900 units under the initiative. My Department is engaged with a number of other Departments and State agencies with a view to securing further lands to reach the agreed target of 10,000 units. In particular, the Department of Health and Children is examining an inventory of health board lands to identify sites, which could potentially yield 1,500 units under the initiative. It is envisaged that more than 11,000 units will be delivered under the various affordable schemes between 2005 and 2007.
Is it not the case that more than €5 billion was taken in tax from first-time buyers last year? As a consequence, 45% of the cost of every house goes into the Government's coffers. What new schemes will be introduced? Does the Minister of State accept the current generation of 20 somethings is the first to be unable to purchase a home? Two people in their 20s must wait until they are in their mid-30s before they can afford to buy their own home. That is shameful and disgraceful, given the wealth in our society and the amount the Government is ripping off home buyers.
Is it time the Government introduced a special savings scheme for first-time purchasers under which they would be given €1 interest for every €3 they saved over a two-year period; frontloaded mortgage interest relief, which is currently spread over the lifetime of the loan, over the first seven to ten years; and abolished stamp duty on houses so that first-time purchasers can buy second hand houses, which are cheaper and more accessible to them than new homes? The Minister of State is letting the country down and he is also letting young people down by not giving them a chance.
I do not agree with the Deputy. Ten years ago, 22,000 houses were being built annually whereas this year more than 75,000 will be built. It is estimated that 43% of houses are being bought by first-time buyers. Most people are managing to buy.
They are not.
Certain categories of people need help and that is why targeted schemes have been introduced. The shared ownership scheme was introduced in the early 1990s while the local authority scheme was introduced in 1999. The Part V and Sustaining Progress schemes were introduced in recent years.
Last year, under the local authority schemes, 2,600 affordable units were provided and they were targeted at people in the low income bracket whom I acknowledge have been under pressure in recent years. The Part V and Sustaining Progress schemes have yet to kick in but housing cannot be addressed by just clicking one's fingers. It takes time and policies must be introduced and developed. All developers say it takes approximately four years to build and sell houses.
A number of the initiatives mentioned by the Deputy would be more appropriate to the Minister for Finance. However, mortgage interest relief has been adjusted, as has stamp duty. House prices continue to increase and, perhaps, stamp duty needs to be adjusted again. The rent a room scheme has also been introduced.
Why not abolish the VAT increase on building materials?
Deputy O'Dowd stated 45% of the cost of every house goes to the Exchequer. The research he conducted is absolute nonsense. It was bull of the highest order. If one buys a suit or a desk, one pays VAT. That research was a theoretical exercise, which is not relevant to the real world.
The number of houses built annually has increased for each of the past ten years. Ten years ago, 22,000 houses were being built annually but this year more than 75,000 units will be built. Houses are being constructed at a faster rate than in any other country. We are getting there. There was significant pent up demand and the increase in population must be considered in this context. According to last year's census, the population had increased by 8% in the previous six years while the number of people in the key household formation age group, which is between 25 and 34, increased by 18%.
The Government knew that 25 years ago.
We did not because if we did, we would be much better off.
We had emigration 25 years ago.
That put significant pressure on the market.
People cannot afford houses. Investors are buying them.
Young people are buying them.
The Minister of State has developed a skill whereby he avoids answering questions by putting two questions together, which are not necessarily connected, and then giving us lectures on everything from population growth to the weather.
That is not much of a skill.
I refer to the information he outlined, which is extremely interesting. Do I understand the Minister of State correctly that since the Planning and Development Act 2001 was enacted, 196,000 private houses have been built — almost 200,000 dwellings built — and that of those, only 209 are affordable houses under the Part V scheme and only 106 are social housing? Is the Minister of State serious in informing the House that only 300 social and affordable houses have been made available under Part V, out of a total of 200,000 built since the Planning and Development Act was enacted three years ago? Is that the information he is giving the House?
I gave the House the details and answered Deputy O'Dowd's question.
The Minister of State should answer my question now.
I will. We have four affordable housing schemes.
I know all about those schemes. My question is about Part V.
Allow the Minister of State without interruption.
I am answering the Deputy by saying we have four affordable housing schemes. Under the third of those schemes, which is the Part V scheme, approximately 300 affordable houses have been produced to date.
Out of 200,000.
But it is a relatively new scheme.
It has been in existence for five years; it was announced five years ago.
Deputy Gilmore, I ask you to allow the Minister of State to answer without interruption.
The Minister of State should not insult the House. It was five years ago.
As I have tried to explain to the Deputy at every Question Time and elsewhere, it takes time to build houses.
Five years.
Anybody in the business will tell the Deputy that from the time a site is acquired, it takes four or five years. While 196,000 houses have been built in that period, most of them had received planning permission before Part V was enacted. As such, they were built without having to come under the regulation of Part V. The real value of Part V will be seen from this year onwards.
It always is.
Allow the Minister of State, Deputy Gilmore, please.
Well, it really will be and it may take a few more years to really build up. One cannot think in the short term in terms of housing. One must make policy decisions which are for the long term. One must just forget about the headlines on next month's newspaper.
The Government has been in office for the long term, for seven years, and it has not delivered.
We are delivering. There will be 75,000 houses this year. It is all about supply. Only when the supply is there will sense be brought to the market and units will become more affordable.
The 12 minutes allowed for this question is concluded.
