O’Brien condemns housing ‘hysteria’ in robust Bill defence
DARRAGH O’Brien has denounced criticism of his controversial affordable housing plans, saying it’s ‘bordering on hysterical’.
The Housing Minister launched a robust defence of his new Bill yesterday, in the face of criticism from finance officials, the Economic and Social Research Institute and the Central Bank.
It will free up State land that is ‘lying idle’, for housing, and help renters paying €2,000 a month move to a mortgage of €1,100 a month, he said. As part of his new Affordable Housing Bill, the Government will take a stake of up to 30% in a house where purchasers can’t afford the full mortgage.
But the minister said the average take would be about 20%. The plan will be available to first-time buyers of homes costing up to €400,000, but there will be different price caps in different areas.
Officials from the Department of Public Expenditure and Reform, the ESRI and the Central Bank have warned against the scheme.
The Central Bank, which regulates home loans, warned it could have ‘immediate impacts’ on rules dictating how much a person can borrow, based on their income. Because the scheme adds a sum on top of the mortgage, the bank may have to change its lender rules, designed to stop banks from issuing irresponsible loans in the wake of the Celtic Tiger.
Sinn Féin said the scheme would benefit developers, and increase house prices and homeowners’ debts. Minister O’Brien said yesterday that the Central Bank will not have to change its rules because of the plan for the State to take a share in houses.
‘We have no desire to and there is no question of us looking to amend any of the Central Bank lending rules that are in place. They are right, they are proper and they are prudent,’ he told Newstalk’s Pat Kenny Show.
He said it would not be a second mortgage, and added: ‘Some of the responses politically from the left and hard left have been bordering on hysterical on this.
They have been talking about the issue of house price inflation; €75million in a mortgage market of €11billion is less than 1% and they are targeted measures.’
His Bill would ‘make a big difference for those who have lost all hope of being able to own their own home’, and it will be ‘in place before the summer’, he said.
‘There is so much State land out there that is sitting idle that could be used for housing. The State will have a big role in driving supply, through the Land Development Agency and the Affordable Housing Bill,’ he said.
‘There are people out there at the moment paying rents of up to €2,000 per month, and if they could get a mortgage, they would only be paying a mortgage of €1,000 or €1,100 per month and many of those people want the opportunity to buy their own home.
‘That is why these targeted measures are needed.’
The Central Bank said yesterday that it would have to evaluate the finalised scheme.