Irish housing crisis – the election promises and the reality - Whats On In West Cork

Irish housing crisis – the election promises and the reality

David Caldwell 11:26 13 Feb 2020


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Housing bodies have warned that election promises to tackle the housing crisis will not be met unless the next Government addresses blockages in the system

The Irish Homebuilders Association, part of the CIF, is inviting all new TDs and local politicians to a series of regional roadshows. The purpose of these meetings is to inform politicians about the specific challenges preventing homebuilding in their areas.

Director of Housing, Planning and Development with CIF, James Benson said:

“The reality is that homebuilders face multiple barriers preventing them from building the numbers of homes people require. These barriers are the reason people can’t secure homes, rents are high, social housing lists are swelling and more and more young couples are in ‘rental purgatory’. Housing was the key issue in the last election so it’s vital that whoever forms the next Government understand the challenges on the front-line of housing delivery in Ireland today.

We’re inviting local politicians and TDs to attend and hear first-hand some of the barriers facing homebuilders. The workshops will also provide the latest information on all housing and planning issues to ensure that companies are up to date with changes in legislation and regulation prior to engagement with statutory agencies.”

Chairman of the Irish Home Builders Association (IHBA) Neil Durkan said:

“Any homebuilder is welcome to attend the Irish Home Builders Association regional Workshops and they will provide really valuable insights into the current issues blocking supply.

The key challenge facing the industry is the fact that young people can’t secure mortgages. Many would be buyers have been forced into longer term rental with very little prospect of saving for a deposit due to tighter central bank fiscal policies. This means there are fewer couples that could buy a home. As a result, banks are limited in lending to home-builders so they can’t build and supply remains low.

On the other side, the cost of construction is too high due to the Government tax take on every home built. This means higher prices in Dublin and little or no homebuilding outside the capital.

The tax take by Government means that as our industry strives to play its role in addressing climate concerns and builds better quality more energy efficient homes, additional regulation makes homebuilding even more expensive and this is impacting on supply.

He went on to say:

We need a scheme to assist the first-time buyers to get on the property ladder. We believe a Shared Equity Scheme whereby the Government take an equity stake in new homes with the first-time buyer effectively repaying the loan over a defined term. This will help buyers to bridge the gap between the restricted lending terms a bank can offer and the difficulties buyers are having saving a deposit.

Our message to politicians from every party is without a Shared Equity Scheme many more people will be forced into long term rental and increase the numbers forced onto social housing lists. The clock is already ticking for the next Government, if they don’t remove some of these barriers, housing supply will not increase and they will have to face an electorate that has lost patience with the system when it comes to housing.”

The IHBA is of course an industry lobby group and there is ample evidence that loosening of mortgage criteria and the help to buy scheme have accelerated house price inflation as supply generally takes three years to respond to stimuli. There is also ample evidence at the price level that first time buyers have been helped by the scheme they did not actually need help which has been directed at couples in well paid taxable employment.

The IHBA are on sounder ground when they speak about shared ownership and taxation on new housing. The latter includes very high VAT rates on new houses and excessive charges for supply of services by utilities and Local Authorities who set contributions for taking over estates. Essentially these are monopoly providers who hide their inefficiencies in high connection charges. Then there are other costs here which are significantly higher than, say, the UK. The Troika left Ireland after the bale out without achieving the legal reforms the Government signed up to - so there is no independent regulation of the legal profession and no competition on Conveyancing which typically costs twice the UK level. This is compounded by ridiculous Land Registry charges such as €650 + to register a "First Title." A premium price for a very inefficient and slow service?

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