Budget 2017 does not prioritise housing supply – Cowen

Published on: 12 October 2016

Fianna Fáil Spokesperson on Housing Barry Cowen TD says Budget 2017 represents a missed opportunity in addressing the lack of housing supply.

Deputy Cowen pointed out that the new Help-to-Buy Scheme is unlikely to lead to an increase in housing supply, and could instead lead to an overheating of the market for first-time buyers.

“People expected the Government to put forward a credible housing package in Budget 2017 aimed at addressing the lack of housing supply. Unfortunately what was unveiled instead was a risky first-time buyer’s scheme which is unlikely to have any meaningful impact on shaking up the housing market.

“I have serious concerns that the help-to-buy scheme will merely lead to increased house prices for first-time buyers. The grant is restrictive in that it is limited to new builds, so now we have a situation where tens of thousands of potential first-time buyers will be chasing fewer than 10,000 new builds which are expected to be delivered next year.

“Fianna Fáil believes that the Government should focus on policies which specifically address the lack of housing supply. Meaningful measures should be taken to help address rising construction costs, which will in turn incentivise the construction of new housing.

“Such measures that can be taken include tackling high development charges and the introduction of temporary VAT reductions until the housing market returns to a properly functioning state. The system of building certification should be reformed so that it is led by local authorities, similar to the situation in the UK where regulatory costs are much lower.

“The Government should also encourage greater use of funding from the private sector to help provide competitive finance options for new housing builds. For example the Credit Union sector has signalled that it has upwards of €5bn of capital that could be used to help kick start housing construction.

“It is clear that the Government needs to come forward with further measures to address the lack of housing supply. The help-to-buy scheme alone will not achieve a stable housing market,” concluded Deputy Cowen.

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