Neasa Hourigan (Dublin Central, Green Party)
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218. To ask the Minister for Housing, Planning, and Local Government his views on the ERSI report on the review of the Rebuilding Ireland home loan scheme; and if he will make a statement on the matter. [36083/20]

Neasa Hourigan (Dublin Central, Green Party)
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219. To ask the Minister for Housing, Planning, and Local Government his plans to review the level of the Rebuilding Ireland home loan limit on single-income households in urban areas; and if he will make a statement on the matter. [36085/20]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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I propose to take Questions Nos. 218 and 219 together.

A Review of the Rebuilding Ireland Home Loan (RIHL) was undertaken by the Economic and Social Research Institute (ESRI) and was published on 23 October 2020.

The report provides a high level review of:

- the degree to which the scheme has met its objectives;

- scopes the need for ongoing intervention; and

- assesses selected operational considerations such as credit risks, funding considerations, and its market impact.

The report concludes that there is a clear role for RIHL, which generally allows qualifying borrowers to borrow more than they otherwise could from commercial banks, in alleviating a portion of this unmet mortgage demand on an ongoing basis. Analysis also shows that the demand for the scheme has outstripped the original scheme, and that it does not appear to have had any material impact on national house prices given drawdown levels.

However, it noted that interest rates should be set to adequately compensate for credit risk, and to minimise distortions to borrower incentives and maximise the benefit of the scheme to those who most require these supports. An increase to the base rate was suggested to above the rate in the market for the closest fixed rate product to the RIHL terms. This recommendation was implemented in January 2020.

My Department will now analyse the key recommendations with a view to informing the ongoing operation of this Scheme.

The new Programme for Government ”Our Shared Future" contains a commitment to expand the Rebuilding Home Loan and funding has been secured to allow local authorities to lend a further €210 million through this scheme in 2021.