Shared equity is not the answer to affordable home delivery - Eoin Ó Broin TD
Sinn Féin Housing spokesperson Eoin Ó Broin TD has described the promotion of shared equity as a solution to the housing affordability crisis as a ruse to get around the Central Bank mortgage lending rules.
Deputy Ó Broin was responding to the housing report published by economist Ronan Lyons, commissioned by Irish Institutional Property (IPP), the lobby group for institutional investors.
Teachta Ó Broin said: “The report by Ronan Lyons, commissioned by Irish Institutional Property, calls on the government to reduce the cost of delivering homes and for a shared equity scheme to be introduced to make purchasing a home “more affordable”.
“The promotion of shared equity as a solution to the housing affordability crisis is a ruse to get around the Central Bank mortgage lending rules.
“The home itself is not more affordable under shared equity. The developer pockets the same purchase price with the homeowner taking on two loans instead of one mortgage.
“Shared equity locks in high prices and transfers risk from the developer to the buyer and the state.
“This is highlighted by data from past shared equity schemes where 44% of homeowners ended up in arrears.
“We need to learn from the mistakes of the past and stop repackaging bad schemes that only benefit the developers.
“In fact since private developers are struggling to make it viable to deliver affordable homes, the State should step in and do it.
“A recent report published by the Society of Chartered Surveyors of Ireland shows that delivering public homes on public land can be between €140,000 and €160,000 less expensive than private delivery.
“The government should double capital investment in housing to deliver 20,000 public homes a year, including affordable cost rental and affordable purchase homes.
“The affordable cost rental would cost on average between €700-€900 per month with affordable purchase costing €230,000 in Dublin with no hidden extra equity charge.
“The private market should not be facilitated by the taxpayers to deliver unaffordable homes to rent or to buy just so developers can further increase their profit margins.”