Minister for Housing gives developers an early Christmas present - Eoin Ó Broin TD
Sinn Féin spokesperson on Housing Eoin Ó Broin TD has described Darragh O’Briens shared equity loan proposal as ‘an early Christmas present for developers’.
Teachta Ó Broin said ‘the shared equity loan scheme that the Minister will take to Cabinet next week is not an affordable housing scheme’ and it is ‘a reckless use of taxpayers money.’
Teachta Ó Broin said:
"The Minister for Housing has today announced that he will bring a shared equity loan proposal to Cabinet next week. This loan will cover up to 30% of the value of a new home and loans of up to €100,000 can be provided on homes priced up to €400,000.
"A new state agency will manage the government's equity stake which will be repaid with interest by the buyer. The equity owed by the buyer will increase as the property increases in value. The shared equity loan can be combined with the Help to Buy tax break, though not to the full level of €30,000.
"This is not an affordable housing scheme. It is an early Christmas present for developers. In fact it is exactly what industry groups, Irish Institutional Property and Property Industry Ireland, have been lobbying for since the start of 2020.
"The scheme will not make homes more affordable. It will saddle working people with greater levels of debt and at best it will prop up excessively high house prices. At worst it will push house prices up even further.
"It is deeply ironic that the Minister would announce such a scheme on the same day as Daft.ie published their latest property price report showing house prices rising by 7.4%. The average price of a home across the state is €269,000, while in Dublin is €391,000.
"Minister O’Brien has said that his loan scheme is modelled on a similar scheme that has been in operation in the UK for a decade. That scheme has been widely criticised.
"The British Parliament's Committee of Public Accounts published a report on the scheme in September 2019 which concluded that the loan did not make homes more affordable, that 60% of those who availed of the loan did not need it and that it put borrowers at significantly increased risk.
"The report also said that ‘the large sums of money tied up could have been spent in different ways to address a wider set of housing priorities and focus more on those most in need’.
"Independent research by the British housing charity Shelter found that the shared equity loan scheme has added around £8,250 to the average price of a home. Their report concluded that while the scheme has helped a small number of people to buy this is at the expense of worsening the overall affordability crisis for everyone else.
"House prices are too high. Increasing first time buyers access to credit is not the solution. That is the kind of developer led housing policy which caused the property crash and recession in 2008. Unfortunately it seems that Fianna Fáil have learnt nothing.
"Minister O’Brien’s shared equity loan scheme is a reckless use of taxpayers money. Government policy should be focused on bringing down the price of homes through the direct delivery of affordable homes, not saddling working people with even greater debt while lining the pockets of big developers."