Mr. Barry Quinlan:

I thank the Senator. In terms of the shared equity scheme and the Central Bank, we are working with the Department of Finance and, as I mentioned earlier, the various stakeholders. In terms of the engagement with the Central Bank to date, that has been led by the Department of Finance. While the Central Bank has made some comments so far, it really needs to see the full details of the scheme to be able to make its final informed judgment. We are working towards that but we are keeping them informed through the Department of Finance, particularly around the policy objectives of what we are trying to do, which is to help people to buy their own homes sooner than they would have been able to otherwise but, ultimately, to own their full home in as affordable a way as possible. The Central Bank also needs to see the final details to be able to make their final judgment on it.

As for house prices and supply, and the international evidence, I will make a couple of points. We have looked at the reports from the UK. I mentioned the UK National Audit Office and it reported a double-digit increase of 14.5% in supply and a 1% increase in prices. They were very much on a like-for-like basis. There were some other reports but the National Audit Office report was the one that we looked at in particular. We also met Homes England, which administers that scheme. In the UK, more than 200,000 homes have been delivered under its equity scheme. It is a very big scheme. It has some differences. We have been closely examining it in terms of what worked and perhaps elements of it that did not. We are very much looking at both of them.

In terms of supply, the Ministry is engaged regularly with home suppliers in Ireland. One issue in this regard is that we have a lot of planning permissions. There were 47,000 approvals last year and only half of those commenced. Our sense is that if we can help people to increase realisable demand, the supply will follow. Obviously, some of that remains to be seen. The plan would be to review the scheme after a year to make sure, for instance, that it was increasing supply etc., to check for inflation, to safeguard on those. A lot of work has gone in to inform the development of the scheme and then there are safeguards in terms of the final details. I mentioned some of those, such as price caps etc. that we are working in. It is only when we have the final detail of the scheme that people will be able to fully judge it.

As for the equity stake, the plan is that people would secure a mortgage to be able to buy a large percentage of the home and then be helped to buy that final element and that the State would take an equity stake, either through local authorities or central government, and the person would buy back that stake and own his or her home fully. In the UK model, 50% of households bought out the equity stake within the first five years when there was no interest rate on it. At the cheapest that one could, many people got in and bought their stake.

Consequently, the participants were really helped to buy. They got in and they got to own 100% of the home quite quickly. We are looking at all of those issues. We have tried to bring them all together in the design of the scheme here.

In terms of local authorities and funding, the serviced sites fund was mentioned earlier. That is currently available to local authorities to support enabling infrastructure that can then go on to be contributed towards the delivery of affordable homes for purchase or rental. That is a multi-annual scheme as it is but we are looking at it in the context of issues such as the review of the national development plan, NDP, and how the Exchequer might be able to support local authorities in the delivery of affordable housing moving forward. The serviced sites fund is available already with up to €50,000 per affordable home delivered.

The cost rental model is new to Ireland. The way the homes announced today will be delivered is through State support, in terms of the cost rental equity loan up to 30%. That is capital at the start to support the approved housing body to be able to acquire the homes. The Housing Finance Agency has provided long-term low-cost lending to match that in order that the AHBs are able to acquire the homes. By minimising costs, we are able to achieve - this was the minimum - 25% below market rents. It is really a cost minimisation model whereby those savings are passed on to the renters.