Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 91: To ask the Minister for the Environment, Heritage and Local Government his views on the prospect that first time buyers will be excluded from the housing market if interest rates increase as forecasted to 4.75% in the coming year, causing first time mortgage limits to fall substantially; and if he will make a statement on the matter. [10216/07]

Noel Ahern (Dublin North West, Fianna Fail)
Link to this: Individually | In context

Housing affordability is influenced by a range of factors such as house prices, interest rates and income levels. House prices have stabilised since the last quarter of 2006, following generally high rates of increase since the June 2005 quarter. ECB interest rates have increased from 2% to 3.75% since December 2005. Economic commentators do not at present predict further significant increases in interest rates. Recent house price moderation, increased mortgage interest relief, increases in take home pay and competitiveness in the mortgage market are assisting housing affordability. I expect that these factors and continuing economic growth will continue to have a positive effect on affordability in the coming year.

We are also assisting housing affordability by promoting housing supply, particularly affordable housing, as part of the integrated policy approach set out in the Government's new statement on housing policy Delivering Homes, Sustaining Communities. We have put in place a range of targeted schemes to assist first time buyers, directed specifically at those who are unable purchase on the open market. These include the Shared Ownership Scheme, the 1999 affordable housing scheme, affordable housing delivered through Part V of the Planning and Development Acts 2000 to 2006 and the Affordable Housing Initiative. The Affordable Homes Partnership is co-ordinating and accelerating the delivery of affordable housing in and around Dublin. The increasing momentum of delivery, particularly through Part V, will be sustained and accelerated in order to support the achievement of the ambitious target set in Towards 2016 to deliver some 17,000 homes over the period 2007 to 2009. This is a substantial commitment to meeting the needs of first-time buyers seeking affordable housing.