Tuesday, 28 September 2021
Department of Housing, Planning, and Local Government
156. To ask the Minister for Housing, Planning, and Local Government if he plans to introduce supports to assist first-time homeowners to deal with the unprecedented rise in the cost of building materials; and if he will make a statement on the matter. [46459/21]
Changes in relation to building material costs are monitored and recorded by the Central Statistics Office (Wholesale Price Index for Building & Construction Materials). The cost and supply issues that have arisen for basic building materials such as steel, timber, concrete and plastics are also occurring internationally. They appear to result from a range of contributory factors including Brexit, the disruption caused by Covid 19, increased global demand and other global events that have impacted on supply chains. Reducing residential construction costs is a key theme within Housing for All, with actions centred on analysis, innovation, research and productivity through a whole-of-government approach in collaboration with Industry.
The Housing for All Strategy delivers on the Programme for Government commitment to put affordability at the heart of the housing system. It is the largest State-led building programme in our history, backed up by an unprecedented financial commitment in excess of €4bn per annum.
Over 300,000 new homes will be built by the end of 2030, including a projected 90,000 social homes, 36,000 affordable purchase homes and 18,000 cost rental homes.
Specifically regarding middle-income families wishing to buy homes, the Housing for All strategy contains a multi-pronged approach to improving affordability.
The Local Authority Affordable Homes scheme and the First Home scheme are primarily focused on supporting first-time buyers purchasing newly built homes. Both of these schemes will be targeted at households constrained by the maximum mortgage and deposit available to them. The gap between the market value and what the household can afford (including with the assistance of the ‘Help to Buy’ incentive) will be bridged via the provision of equity support. The equity support can subsequently be redeemed at any time at the home-owners discretion, or remain outstanding until the home is sold or passed on.
In addition to these distinct shared equity schemes, the Housing for All strategy also provides for the 'Local Authority Home Loan', which will be in place later in 2021. The Local Authority Home Loan is a successor to the Rebuilding Ireland Home Loan Scheme, and will include an increase in the income ceiling for single applicants, thus increasing the number of people eligible. From 10 September 2021, I have already implemented a reduction of the mortgage interest rate by 0.25% for new borrowers under the existing Rebuilding Ireland Home Loan (RIHL). This lower rate will also apply to loans issued under the forthcoming Local Authority Home Loan. The Help to Buy scheme is also currently available to help purchasers in accessing homes.
Further to the above, the Housing for All strategy also provides the following supports;
- increased funding provided to the Land Development Agency,
- the Croí Cónaithe initiative intended to service sites and refurbish existing vacant properties in regional towns and villages,
- a higher stamp duty rate for institutional investors that purchase family homes,
- increased regulation of short-term letting properties.
- additional measures to reduce vacancy rates, and
- expanded supports for retrofitting existing homes.
Collectively, these measures will improve affordability for all families or individuals wishing to purchase a home.