DUBLIN: The Government’s new housing bill aims to address the problems facing the homeless in the country. The Minister for Housing claims that the Affordable Housing Bill is a major government intervention to address the housing crisis for first time buyers.
The Affordable Purchase Shared Equity Scheme is a key component of this scheme. But the question arises as to whether this alone will solve the problems of first-time buyers. But Housing Minister Darragh O’Brien is confident that the bill will solve people’s problems. He says the scheme is an international practice and has increased supply in the UK by 14%.
Affordable Purchase Shared Equity Scheme
In case of a first time buyer who is unable to purchase a new-build up, the government will provide equity up to 20% subject to the regional price limit, while a mortgage is taken out on the rest. The equity stake is free for the first five years, followed by lower interest rates.
Price of houses
Under the government’s new scheme, homes up to €450,000 in Dublin City and Dún Laoghaire will be considered affordable. Couples with a combined income of €90,000 euros can apply under the scheme to buy homes worth up to €450,000. Government pricing is based on the local authority area.
Affordable homes in south Dublin, Fingal, Cork, and Galway counties, as well as Wicklow, are priced up to €400,000. The price range is €350,000 in Cork, Limerick, Kildare and Meath, €300,000 in Clare, Westmeath and Wexford, and €275,000 in Carlow, Louth and Offaly.
People can apply for home purchases of up to €250,000 in Kerry, Kilkenny, Laois, Waterford and Roscommon, and up to €225,000 in Cavan, Donegal, Leitrim, Longford, Mayo, Monaghan, Sligo and Tipperary.
€75m allocated for this year
The Affordable House Bill has been allocated €620 million in the 2021 budget. Of this, €75 million is for shared equity portion of the plan. The government initially aims to help buy 2,000 homes.
But, the scheme has not yet been approved by the Central Bank. There is a risk that it will adversely affect inflation. However, the government claims that this has been mitigated by the need for safeguards, including price caps, and the availability of the least amount of equity for eligible borrowers.
More homes will hit the market
The Government and the Department of Housing believe that activating existing unused planning permissions will increase housing supply. The government says 40,000 homes will be available in Dublin alone.
It is hoped that this will close the gap for the so-called Generation Rent. Securing the manufacturing sector is expected to help create jobs and economic recovery.
Opposition says housing project is a big mistake
The opposition does not agree with any of the government’s arguments. Labour Party’s housing spokesperson Senator Rebecca Moynihan said the government is only concerned with large investors.
“Yet again the lobbyists have captured Government. Government has chosen to abandon cost rental, opting instead for a profit model and a shared equity scheme that expert commentators, such as the ESRI and Central Bank, have said is a demand side measure. This will increase house prices rather than represent a step change in our approach to housing, making it genuinely affordable for ordinary people,” she said.
Social Democrats housing spokesman Cian O’Callaghan also fully agrees with the Labor spokesperson. “The Government is living on another planet if it thinks €450,000 for a home in Dublin – and €400,000 in Cork and Galway – is affordable. It simply is not,” O’Callaghan said.
“These inflated price caps will mean that so-called affordable homes will be out of reach for most people. The decision to introduce the ‘shared equity’ scheme, and the inclusion of these expensive homes, is more about providing subsidies for developers than homes that are genuinely affordable,” he added.
Sinn Féin spokesperson on Housing Eoin Ó Broin TD said the scheme is disappointing. “We proposed to scrap the pro-developer shared equity loan scheme, and to divert the allocated €75million to local authority and approved housing body affordable rental and purchase homes.
“It is clear there has been no change in housing policy from the last government and the big losers will be first time buyers, single people and people who suffered relationship breakdown and lost their family home.
“The only way to tackle the affordable housing crisis is to fund local authorities, approved housing bodies and community housing trusts to deliver affordable homes to rent and buy at scale,” Ó Broin said.
Kindly click the link below to join WhatsApp group chat to get important news and breaking news from Irish Samachar