The opposition has branded a proposed shared-equity homes scheme “reckless” and called on the Housing Minister to scrap the plan.
It comes after the Irish Independent revealed that the Central Bank has doubts about the scheme in the Affordable Housing Bill, proposed by minister Darragh O’Brien.
Under the scheme, the State would buy a 30pc stake in the homes of first-time buyers, who will take out a mortgage with the bank for the remainder of the cost.
Sinn Féin housing spokesperson Eoin Ó Broin called for the shared-equity scheme to be scrapped completely from the bill while it undergoes pre-legislative scrutiny in the Oireachtas Housing Committee.
He said he was not surprised “at all” to hear that the Central Bank had serious concerns over the scheme.
“We have empirical evidence to show that this scheme does not work and could be very dangerous,” he said.
“We know from the Celtic Tiger if you increase mortgage credit into the market it increases house prices. Fianna Fáil, when they were last in Government, very regularly ignored the advice of experts and regulators.
He said the scheme would have “negative consequences”.
“This is not an academic matter. This is about the single biggest purchase of a single person or a couple, buying their home,” he continued.
“For the Government to act in such a reckless way, not only potentially pushing up house prices but saddling some working people with an unsustainable level of debt, it’s just reckless in the extreme.”
Labour’s housing spokesperson Senator Rebecca Moynihan also called for the Housing Minister to either reform the scheme or “scrap it completely”.
She said the Government had had a ‘Trumpian’ response to the Economic and Social Research Institute (ESRI) warning on Tuesday that it may hike house prices.
“The reaction of the Government this week, by this Trumpian, coordinated attack on an independent institution showed a lack of willingness to engage on the real detail of the scheme and it’s very, very concerning.”
Ms Moynihan said the minister was ignoring “all independent advice” and that “shoving money to developers” was not going to solve the crisis.
Meanwhile, Social Democrat housing spokesperson Cian O’Callaghan said if the shared-equity scheme was scrapped from the Affordable Housing Bill, it should not be revisited.
He said: “€75m has been allocated for that scheme but it should be transferred directly into building cost rental homes. We now have multiple credible sources raising very strong concerns that the scheme could push up house prices. It’s very worrying that the minister is not listening to these concerns.”
In its opening statement to the Housing Committee this week, the ESRI warned the committee the shared-equity scheme would increase house prices.
Local Government Minister Peter Burke said yesterday the shared-equity scheme was “only one piece in all our armoury” to try to increase affordable and social homes in the Affordable Housing Bill.
He said that if the shared-equity scheme was looked at “in isolation” he could see how there might be concerns.
“If you look at this proposal in isolation, yes you can see how people would be concerned about the demand side, but there are 23 heads of the bill, and 20 out of the 23 deal with other measures to increase supply outside of that scheme.”
Source: Irish News