O’Brien under f ire as help-to-buy home scheme in tatters
THE Coalition’s central pledge to help couples buy their own home has been dealt a body blow by the revelation that most people who apply for the State-backed mortgage plan are turned down.
The high-profile Rebuilding Ireland Home Loan Scheme was launched in 2018, amid the spiralling homeless crisis, with the idea to get people out of the rent trap and buying their own homes.
It was aimed at reliable first-time buyers, who had a deposit and the capacity to repay a mortgage, but who had been unsuccessful with other lenders.
It was specifically aimed at the lower end of the housing market, and hopeful couples were told to apply to their local authority, who could okay loans at rates of 2% to 2.75% over 25 years.
Though the interest rate was lower than lenders were offering, it would mean families had a chance to buy their homes and homeless people would no longer depend on taxpayer supports.
David Hall, chief of the Irish Mortgage Holders campaign group, said: ‘There is no flexibility.’ He added that the State would actually save money in some instances by granting loans. Figures secured by Sinn Féin TD Johnny Mythen have revealed that more than half of all applications for a Rebuilding Ireland Home Loan failed. A Dáil question from the Wexford TD to Housing Minister Darragh O’Brien revealed that 7,713 applications had been made for the home loans, and of those 3,817 were approved and 3,896 were declined.
Though Minister O’Brien did not provide, at the time, a breakdown of the yearly applications, sources conceded that the level is now ‘falling through the floor’.
A separate series of questions from the Sinn Féin Housing spokesman Eoin Ó Broin revealed that last year applications for the scheme fell by two fifths.
Up to last September, 1,084 valid applications had been assessed and 495 had been recommended for approval.
By contrast in 2019, there were 1,864 assessed, with 940 approved, that meant 42% fewer applications and 47% fewer approvals.
Budget 2021 made €210m available for lending for applicants with an annual gross income of €50,000 or less, or €75,000 or less combined for joint applicants. However, housing experts have told the Irish Mail on Sunday that they believe the amount of mortgage draw-downs this year has dropped by as much as 70%.
A key factor in this fall is the decision by Minister O’Brien that anyone on pandemic support would not qualify.
Mr Ó Broin warned: ‘The minister needs to conduct an urgent review of the scheme generally and the blanket coronavirus ban in particular.
‘That needs to go and to be replaced with case-by-case assessment,’ he said. Figures supplied by the department reveal that 18 local authorities have supplied less than a hundred houses under the scheme, with the lowest being Leitrim, eight, Cavan, 12, and Monaghan, 29. The startling figures also reveal that just eight councils accepted more applications than they rejected.
Mr Ó Broin also warned: ‘This is a scheme that is chronically under-performing. It needs to be urgently reviewed.’
Separately, there is cross-party concern about the powers being given to the Land Development Agency, whose chairman is the former finance secretary general John Moran, to acquire and dispose of council land for building.
One senior Fianna Fáil source said: ‘There are real anxieties among councillors and TDs that the minister could be accidentally creating a Nama or even worse a HSE for council housing.
‘Look at what happened after the HSE abolished the health boards. You take powers away from the councillors at your peril.’ It is, they warned, ‘a dangerous legislative experiment and not without political risk either’.
‘Councillors may be at the bottom of the political food chain, but you don’t need to alienate the totality of them.’
A Fianna Fáil insider, who is unsympathetic to Mr O’Brien’s leadership ambitions, said: ‘The clouds are gathering over Darragh. The “Grand Tour” is sunk, and now this. The more the minister meets his councillors, the more it appears to be that he is losing friends and not influencing people.’
‘The State would save money by giving loans’
‘The amount paid out is now down by 70%’