Ms Dara Deering:

I thank the committee for the invitation to appear today. I am joined by my colleagues, whom the Chair has already introduced.

HBFI is a Government initiative to increase the supply of new homes, for owner-occupiers, renters and social housing, by providing loans on commercial terms to small, medium and large housebuilders for commercially-viable developments throughout Ireland.

Last month, we published a performance update that showed we had grown total loan approvals to €835 million as at the end of December 2021. The funding we have approved can deliver 3,729 new homes in 71 developments in 18 counties. Drawdowns have already taken place in respect of 57% of the facilities we had approved at the end of December. This shows that the houses and apartments being built with HBFI funding are being completed quickly, thereby meeting some of the immense demand for housing. Furthermore, I am pleased to say that our strong progress has continued into 2022, with the result that, as of the end February, our total loan approvals have grown to more than €1 billion. These will support the potential delivery of over 4,400 new homes across 20 counties.

HBFI funding has been effective for several reasons. By listening to our stakeholders and focusing on developments where housebuilders experience difficulty raising funding from traditional sources, HBFI addresses the gaps in the traditional marketplace and provides a rigorous but fast loan approval process. Our focus on supporting incremental housing supply gives us a flexibility that may not always be available from mainstream banks. Equally, while mainstream banks often gravitate towards urban areas, we have a national remit to try to support new home supply in every county and not just the big cities.

Our product range will take into account the market reality that some housing schemes will simply be too small for other lenders to support. Through our strong stakeholder engagement across the public and private sectors, the HBFI can identify trends and gaps in the funding market from the ground up.

However, not all the challenges can be predicted, as the Covid pandemic has demonstrated. The HBFI’s ability to respond to the risk that there may be further, albeit temporary, challenges as a result of Covid-19 impacting on the timing of future supply brought about the creation of the momentum fund. As the initial €200 million was fully committed within three months, the strength of demand resulted in the HBFI adding a further €100 million to the fund. The success of the fund has continued to the extent that it is now more than 90% utilised and the time is right to close it to new applications. The momentum fund is just one example of how the HBFI’s agile business model can respond to disruptions to residential development finance and tailor its offerings to the areas where demand exists the most.

In reality, the HBFI is just one part of the solution to the supply-demand imbalance that exists, which is causing so much difficulty for owner-occupiers, renters and those in need of social housing. We feel strongly that increasing supply across the market is beneficial for everyone. By funding developments aimed at owner-occupiers, we are helping these people move out of the rental sector and freeing up homes for other renters, thereby increasing the supply in that sector. By funding new homes for rental, we build on that progress, increase the choice available to renters and try to help alleviate some of the pricing pressure existing in that market.

Access to development finance for all types of housing remains a key issue for homebuilders and is vital to support the continued delivery of housing throughout the State. Through the strategies I have outlined today, the HBFI seeks to address the financing challenge and ensure that finance is available where the level of demand makes a development viable. We take great pride in being part of each of the developments we finance and in seeing foundations being dug and diggers at work. That is what the HBFI is all about; turning the finance we have available into homes.

This concludes my opening remarks. I hope this has given the committee a better understanding of the work of the HBFI. My colleagues and I will do our best to answer any questions members may have.