I am determined to ensure that the social housing programme is framed in a manner which optimises the delivery of social housing and the return for the resources invested. To achieve this it is essential that we tailor the use of available Exchequer supports to prevailing conditions and explore the full range of solutions to address housing needs. The social housing capital budget has been reduced from €1.535 billion in 2008 to just over €333.7m this year, and the financial parameters within which we will be operating for the coming years rule out a return to large capital funded construction programmes. Nevertheless, the Government is committed to responding more quickly and on a larger scale to social housing support needs through a variety of mechanisms, including through increased provision of social housing. In spite of the challenging circumstances within which local authorities are now operating, a tentative projection of 4,000 to 4,500 housing units is anticipated for 2012.
Delivery of social housing will be significantly facilitated through more flexible funding models such as the Rental Accommodation Scheme and leasing, but the Government is also committed to developing other funding mechanisms that will increase the supply of permanent new social housing. Such mechanisms will include options to purchase, build to lease and the sourcing of loan finance by approved housing bodies for construction and acquisition. There is also obvious potential, across a range of housing programmes, for the Government’s objective of sourcing and providing suitable residential units for use as social housing to be aligned with the commercial objectives of the National Asset Management Agency (NAMA).
Under the Shared Ownership scheme, the intending purchaser initially acquired a minimum 40% share in the dwelling, with a requirement that they purchase the full ownership within 25 years. The purchaser was required to pay rent on the local authority’s share. These rent payments are intended largely to meet the cost of funding provided by the Housing Finance Agency to local authorities to finance the rented share in the equity of the house. Rent is calculated at 4.3% of the value of the share in the ownership held by the local authority. This amount is increased annually by 4.5%, and excludes any rent subsidy due. The rental formula applied under the scheme is not comparable to rents in the private rented sector, which are determined by the operation of the market. Therefore, movements in private sector rent levels would have no relevant bearing on the calculation of the rental element under shared ownership.
To take account of the current housing market conditions, the Government's housing policy statement also announced the standing down of all affordable housing schemes, including the Shared Ownership scheme, in the context of a full review of Part V of the Planning and Development Act 2000. That review is now underway and it is expected to conclude later in the year. Any future changes to legislation governing affordable housing schemes, including the Shared Ownership Scheme, will be informed by the review.
