The policy intent of developing a new Cost Rental sector in Ireland is to assist those on moderate incomes who are facing affordability pressures in the private rental market and may not qualify for social housing supports. The main eligibility condition for leasing a Cost Rental dwelling is that a household’s annual income, less income tax, PRSI, USC and superannuation contributions, must not be greater than €53,000, as per the Cost Rental Letting and Eligibility Regulations:
irishstatutebook.ie/eli/2021/si/755/made/en/print
Cost rents are set to cover the costs of providing, financing, managing and maintaining each home. In order to reduce these costs, thereby making the rent lower and more affordable for the tenant, upfront State capital subsidies are being deployed including the Cost Rental Equity Loan (CREL) scheme for Approved Housing Bodies (AHBs) and the Affordable Housing Fund (AHF) for Local Authorities. As such, income limits are important in targeting these limited State resources at those who fall within the moderate income cohort and are considered most in need of support.
This net income limit of €53,000 for Cost Rental is equivalent to gross incomes in the region of €80,000 per year for single and dual-income households. This income eligibility limit was informed by considering affordability and the cost rents achievable under CREL and with data on median income levels. The parameters for Cost Rental eligibility will be kept under review to ensure the scheme best targets the support provided.
Households who are eligible for Cost Rental or who may be in receipt of household incomes in excess of the scheme’s eligibility limit may also eligible for the range of schemes that the Government has introduced under its Housing for All strategy to support those who wish to purchase their own home. This includes the First Home scheme and the Local Authority Affordable Purchase scheme. These are in addition to existing supports through the Local Authority Home Loan and the Help to Buy scheme, which are all designed to assist first-time buyers to obtain the mortgage finance necessary to purchase their own home.
The First Home scheme has begun to provide affordably constrained first-time buyers with assistance to bridge the gap between the level of funding they can access through a mortgage and the price of a new home. Homes under the scheme must be made available at prices below €450,000 in the Dublin region. It is worth noting that South Dublin and Fingal represent the significant majority of new First Time Buyer Homes in Dublin and the median price of these homes in these local authority areas is € 395,000 and € 420,000 respectively. Given both the 20% of equity support available under First Home and the recent announcement by the Central Bank amending the macro prudential rules to allow Loan to Value ratios of 4:1 times annual income from January 1st 2023, there would be new homes available through the scheme for those on household incomes of below €80,000 in Dublin.
Separately, the first properties are also being sold under the Local Authority affordable purchase scheme, funded by my Department's Affordable Housing Fund and the scheme will ramp up delivery from this point forward. For example, the first 16 homes at Kilcarbery Grange, a South Dublin County Council development, are being sold to eligible purchasers at between €245,600 and €285,300, well below the median first-time buyer price of €385,000 for a home in the area. Further homes are being delivered in Q4 2022 by Fingal County Council at Dun Emer in Lusk, where 2-bed apartments were made available for €166,000, and 3-bed dwellings available for between €206,000 and €258,000.
