Shared Equity loans will not make homes more affordable - Eoin Ó Broin TD
Sinn Féin spokesperson on Housing Eoin Ó Broin TD has this morning launched a document criticising the Minister for Housing’s plans to introduce a state-backed Shared Equity Loan scheme to deliver affordable homes.
Teachta Ó Broin said:
“The Minister for Housing is heading down a well-trodden housing delivery path beloved by Fianna Fáil.
“His ‘affordable’ housing plan is a developer-led plan entirely based on proposals pushed by the Irish Institutional Property and IBEC’s Property Industry Ireland.
“Minister O’Brien’s so-called affordable housing plan will be open to first time buyers and those who lost a property due to relationship breakdown.
“They will be eligible for a secondary loan from a new state agency. The loan will cover up to 30% of the value of the home to a maximum of €100,000 on a property sold for up to €400,000.
“The buyer will also be able to avail of the existing Help to Buy tax relief from Revenue, though not to the full €30,000. Borrowers will start paying the secondary loan after 5 years at an interest rate of 1.5%.
“The state’s equity share will represent a percentage of the market value of the home. Where the property value increases so too does the size of the secondary loan. It has been reported that up to 40,000 households could benefit from the scheme.
“That would see government holding an equity stake of more than €1.5 billion in private residential property. This would represent a significant risk to the taxpayer in any future property crash.
“It is a shame that instead of listening to experts and opposition party proposals on how to deliver truly affordable homes for working people, the Minister for Housing has instead elected to follow the UK scheme.
“A scheme which a House of Commons report published in 2019 concluded that shared equity loans did not make homes more affordable, that 60% of those who availed of the loan did not need it and as the loans were unregulated they put borrowers at significant risk.
“This echoes the independent research conducted by UK housing charity Shelter which found that the shared equity loan scheme led to increased house prices, adding around £8,250 to the average price of a home.
“There is a way to deliver genuinely affordable homes for working people.
“Saddling homeowners’ people with more debt and putting taxpayers on the hook for loans as developers continue lining their pockets demonstrates how Fianna Fáil hasn’t learned from its past.”