Funding has not run out for home loan scheme, says Minister for Housing

A memo instructing the Department of Housing not to take any more applications under a flagship loan scheme for first-time buyers was never seen by the Minister, an Oireachtas committee heard on Wednesday.

The joint Committee on Housing, Planning and Local Government was told the memo dated January 31st last had been released to media under Freedom of Information (FOI) legislation and had been sent by the Department of Public Expenditure and Reform (DEPR) to Minister for Housing, Eoghan Murphy's department.

Mr Murphy told the committee he did not know what the memo was as it had not been released by his Department.

Mr Murphy said any "confusion" over whether the Rebuilding Ireland Home Loan scheme was still operating had been "caused by people asking questions" who already knew the answers and wanted to cause confusion.

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Under the Rebuilding Ireland Home Loan scheme first-time buyers can apply to their local authority for a loan, for up to 90 per cent of the value of the home, up to the value of €320,000 in counties Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow, and €250,000 elsewhere.

Mr Murphy faced robust questioning about reports that funding for the scheme had run out.

While Government anticipated 1,000 loans would be approved over three years, by the end of last year - two years into the scheme - the limit had been exceeded.

Darragh O'Brien, TD (Fianna Fail) read from a memo, released to media under Freedom of Information (FOI) legislation, sent by the Department of Public Expenditure and Reform to Mr Murphy's department and dated 31st January 2019.

“As the approval rating has exceeded the estimated 1,000 mortgages over three years the Department of Housing has been advised that no further approvals should issue for now,” it said.

“Are you saying that memo is incorrect, did you receive it on 31st January?” asked Mr O’Brien. “There are hundreds of really concerned people out there, right now and their concerns need to be addressed, and addressed seriously.”

Mick Barry, TD (Solidarity) said the scheme had been "frozen" and it was "madness in the midst of the greatest housing and homelessness crisis in the history of the State that a scheme such as this would be frozen on the quiet."

‘Surprised’

Mr Murphy had been “genuinely surprised” at how the memo had been reported and any confusion was “being caused by people asking questions that they either know the answer to but want to cause confusion,” the Minister said.

“The scheme has not been closed, funding had not run out,” he said. “Any loan approval that has been given will be honoured...applications are still being received. I have been very clear with the House (the Oireachtas) all along that we were reaching 50 per cent of drawdown and I had been engaging with DEPR”.

In relation to the memo the Minister said: “I haven’t seen it. It was not released from the Department of Housing. I don’t know what that is....The FOI was released by DEPR, not from my Department.”

Richard Boyd Barrett, (People Before Profit) said the Minister's policies were resulting in "the social cleansing of Dublin in particular".

Focussing on his own constituency, he said Dun Laoghaire had had one of the lowest approval rates for the loan scheme, with 20 out of 99 applications approved and he had heard just three had actually been drawn down.

As the average house price in the constituency was €620,000 and the home-loan scheme set €320,000 as the maximum allowable home-value “it is not going to work in Dun Laoghaire”, or in Dublin city where the average house price was €451,000.