CIF welcomes Coveney’s Action Plan for Housing
The Construction Industry Federation has welcomed Minister Coveney’s Action Plan for Housing after the strategy was approved at cabinet level today.
CIF Director General, Tom Parlon said: “There is widespread agreement that the housing supply shortage is a major challenge facing Irish society. Today’s strategy is a welcome step in addressing this challenge of unlocking supply in a sustainable way. The ambitious targets set out today will only be achieved if these measures support house building activity and there is coordinated follow through by all stakeholders including the industry, government and local authorities.”
“The key measures that the CIF believe may have the potential to increase supply include the Local Infrastructure Housing Activation Fund of €200m, the new Housing Delivery Office in the Department of Housing Planning and Local Government, and the proposed fast track planning process directly to An Bord Pleanala for developments of 100 + houses. These are all very helpful measures to assist in shortening the time involved in bringing new residential developments online. The CIF and its members will continue to work with the Department of Housing and the wider Government and its agencies to increase the supply of quality homes in the next five years. Coordinated follow-through is key to ensure the right types of houses are built in the right areas to ensure we build sustainable communities in the coming decade.”
Director of the Irish Home Builders Association, Hubert Fitzpatrick said: “The challenges to be addressed are extremely complex. The key objective of the Action Plan must be to improve affordability for purchasers and renters, and reduce costs. The house building industry will proactively work with the Department in addressing these key issues.”
“There is a whole generation of young couples locked out of home ownership at the moment. Minister Coveney’s strategy outlines a number of practical and immediate steps that can be taken to speed up the delivery of homes. The next step must be to tweak the restrictions on mortgage approvals to ensure that those who can afford repayments can secure the necessary finance for their first home. Our research indicates that the average couple (a teacher and a garda with 5 years’ employment) find themselves €8,000 below the annual income level required to purchase a new average starter home using the loan to income and deposit criteria set by the Central Bank. Banks will not provide the finance required by home builders if they cannot see realisable demand i.e. a steady stream of mortgage approved purchasers”.
“The industry has made a detailed Submission to the Department of Finance for the Budget 2017. Initiatives sought include the introduction of a ‘Help To Buy Scheme’ akin to the successful scheme that operates in the UK. In addition, a temporary reduction in the VAT rate from 13.5% to 9% for housing activity would assist homebuyers and increase building activity. An increase in housebuilding activity of about 16% would make this measure exchequer neutral. Changes to the operation of the standard development contribution schemes would assist as these significant levies are a major upfront cost for home builders. Other initiatives sought are designed to encourage an increased level of housebuilding and rental stock levels so that the residential investor can return to the market.
“Initiatives announced in the Action Plan today must now be complemented by measures in Budget 2017 so that a sustainable level of housebuilding can be restored over the years ahead.”