Noel Grealish (Galway West, Independent)
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681. To ask the Minister for Housing, Planning, and Local Government the engagement he has had with lending institutions regarding the new affordable housing scheme; the engagement held in relation to the clawback; the discussions that have taken place regarding the economic implications and viability for institutions of lending under this scheme given the 30% equity which is held by the Government and in view of the current difficulties persons are experiencing in accessing mortgages under the housing (incremental purchase) scheme; and if he will make a statement on the matter. [18388/21]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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In relation to the Tenant (Incremental) Purchase Scheme, applicants must demonstrate that they have an income that is long-term and sustainable in nature. This ensures that the tenant purchasing the house is in a financial position, as the owner, to maintain and insure the property for the duration of the charged period, in compliance with the conditions of the order transferring the ownership of, and responsibility for, the house from the local authority to the tenant. If the tenant is deemed eligible under the scheme, he or she may fund the purchase of a house from one, or a combination, of his/her own resources or a mortgage provided by a financial institution or a local authority house purchase loan.

In relation to affordable housing more generally, the Programme for Government, ‘Our Shared Future’, clearly lays out our commitment to putting affordability at the heart of the housing system. Government approved priority drafting of the Affordable Housing Bill 2020 on 22 December 2020, the General Scheme of which I published on 20 January last.

The Bill includes provisions to underpin three schemes delivering on the Government’s commitment to prioritise the increased supply of affordable homes through (1) affordable homes for purchase delivered by local authorities, (2) a new affordable purchase shared equity scheme for private homes, and (3) the introduction of a new form of tenure in Cost Rental. The drafting of the Bill is progressing well.

Broadly, the objectives of the shared equity scheme element of the Bill is to improve access and affordability of new homes for first-time buyers, stimulate an increase in supply by improving confidence as to the viability of future housing developments to meet increased realisable demand, and support economic recovery from COVID-19 by encouraging employment in the construction and related sectors.

It is intended that the scheme will be targeted at first-time buyers who are seeking to buy a new home, but who cannot quite secure the full mortgage amount to do so at the present time. It will help eligible purchasers to secure their own home by bridging the gap between the mortgage available to them and the price of the home that is suitable to meet their needs. There is no borrowing requirement beyond that already permitted under the Central Bank’s macro-prudential rules.

The Department’s work involved in designing the Shared Equity scheme is ongoing and has included analysis of similar international schemes together with engagement with a broad range of stakeholders including the pillar banks. As a matter of course, full consideration has been given to the potential benefits and risks of the measure taking on board feedback from a broad range of interested stakeholders and commentators. The final scheme design will seek to maximise the benefits in terms of affordability and supply while mitigating potential risks.

I intend to bring the completed Bill before the Oireachtas as part of the summer legislative programme.

In terms of supporting prospective purchasers in accessing housing and obtaining mortgages, additional affordability measures such as the Help to buy scheme and the Rebuilding Ireland Home Loan (RIHL) are currently available to eligible applicants.

The Help to Buy Scheme has had 23,545 approvals by the end of February 2021, with the estimated total value of approved Help to Buy claims to date in the order of €389.2 million. The RIHL is available for both new a and second-hand homes. At the end of February 2021, the RIHL has had 3,817 approvals. Budget 2021 confirmed that €210 million has been sanctioned for RIHL lending in 2021.