A new scheme to make it easier for people on low and middle incomes to buy homes is at an advanced stage of preparation. The "shared equity" proposals by the Irish Home Builders' Association will involve buyers taking a stake of about 70 per cent in their homes, with an option to acquire the remaining 30 per cent several years later.
No announcement has yet been made about the scheme, but The Irish Times learned details of it last night following the Government's decision to introduce a new package of measures to boost housebuilding and stabilise the market. The package was announced after the Government considered the latest report on the housing market by Dr Peter Bacon, an economic consultant.
Dr Bacon's first report last April led to a series of Government measures to take the heat out of the property market.
The housebuilders' scheme is understood to be along the lines of a recommendation in the latest Bacon Report, which said that a "private sector shared equity scheme", in which the purchaser might finance 70 per cent of the property, with the balance acquired for a specified period by a trust or similar vehicle, could be considered.
Mr Michael Goggins, the director of the Irish Home Builders' Association, said that the association was in the final stages of consultation with its members on the details of the scheme.
Typically, such schemes would involve the house purchaser taking an initial mortgage to cover 60 to 80 per cent of the purchase cost and having an option to buy the remaining equity after a specified period of at least ten years. A mechanism to fund the rest of the purchase price and hold the equity would be required.
The Government, in its response to the Bacon Report, pointed to the recently-announced scheme whereby local authorities will provide new homes aimed at lower-income families. It said that "other approaches which would involve access to additional mortgage funding without the necessary prerequisite of an increase in housing supply will not be considered at this stage". This is understood to refer to a mortgage scheme proposed by Bank of Ireland, which will not now proceed.
It was an indication of the priority which the Government attaches to the housing issue - and of its political sensitivity in the run-up to the local elections in June - that the Taoiseach, Mr Ahern, took charge of the announcement of yesterday's package of Government measures at a press conference in Government Buildings.
The latest initiatives include opening up the northern fringe of Dublin city for the development of some 16,000 homes by settling in the short term for "temporary" sewage treatment facilities, pending completion in 2004 of a major sewerage scheme.
In response to Dr Bacon's finding that other significant housing schemes were still being delayed by inadequate services, the Department of the Environment is pressing local authorities to "expedite delivery" of schemes in a £39 million programme. According to estimates by the Department of the serviced land available in the greater Dublin area, there would be sufficient land to construct more than 64,000 housing units at the end of this year, a further 40,000 by the end of 2000 and almost 42,000 more by the end of 2003.
The Government has rejected a recommendation that the Minister for the Environment, Mr Dempsey, should use his powers to issue a general policy directive setting out "sound principles" for the development of higher-density housing. A statement noted that draft planning guidelines, which generally favour doubling standard residential densities, had already been issued. When they were adopted, the planning authorities would be "obliged under law to have regard to them".
The Bacon Report also recommended that tenants, now hit by much higher rents, should be able to claim a higher level of tax relief. "This proposal requires further consideration in the context of overall budgetary policy", the Government said.