Home builders

26% drop in planned developments

The Irish Home Builders Association has called for urgent and targeted action to be taken in the 2021 Budget to address the challenges of affordability and supply of new homes.

The IHBA represents hundreds of home builders of all sizes across Ireland.

James Benson, spokesman for the IHBA, said the delivery of homes is well behind what it should be.

“We should see an average of 36,000 homes built each year over the next twenty years in all types of occupancy, whether social, private or rental. A survey of IHBA members, who build 85% private accommodation in Ireland, suggests that the Covid-19 pandemic has increased the delivery time for houses and added to the existing uncertainty in the market,” he said.

According to Mr Benson, they have seen a “noticeable” decline in housing starts which will severely affect supply over the next 18 months.

“Members are reporting a 26% drop in planned developments this year and a further 13% drop for 2021. The 2021 budget provides an opportunity for the government to introduce measures that will speed up the delivery of new housing,” it said. -he declares.

In its pre-budget submission, the IHBA identified three measures to address the affordability issue.

He said a shared capital system would allow consumers with a combined income of €70,000 to access the market. He said the scheme would be loan-based, self-funding over time and capped based on housing type and location.

In the submission, he called for a commitment to continue the Buyer’s Assistance Program, which will help potential buyers secure the deposit required to secure their home mortgage and accelerate the pace of new home starts. . In the twelve months to the end of March 2020, he said 78% of first-time buyers used the purchase assistance program.

The IHBA has also called for an increase in the cap on Ireland’s Rebuild Home Loans to match the caps of the Shared Equity Scheme. He said doubling the current funding would provide opportunities for struggling first-time buyers. The Rebuilding Ireland Home Loan is a government backed mortgage for first time buyers who cannot obtain home loans from private finance institutions.

The IHBA has also identified measures to address the supply issue.

He called for an extension of Home Building Finance Ireland’s ‘Momentum Fund’ beyond Covid-19 until at least the end of 2021 and called for greater access to development finance at rates competitive with pillar banks. The HBFI Momentum Fund is designed to ensure that new large-scale residential projects continue to be launched and delivered after Covid-19.

The IHBA also wants to align the taxation of private owners with that of corporate owners in order to encourage private investors to return to the market.

A survey of IHBA members outlined the impacts of Covid-19 on the delivery of new homes and how Budget 2021 measures can speed up that delivery.

“This latest survey shows that if appropriate measures are introduced in the 2021 budget, our members can deliver 9,000 additional homes across a number of tenure types to the Irish market. These additional homes alone would provide 1, 04 billion in state revenue,” said James Benson. .