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Pathway to supporting homeownership and increasing affordability
From Department of Housing, Local Government and Heritage
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Affordability and the chance to own a home is at the heart of the government’s Housing for All policy. It recognises that significant new supports are needed so that those who want to own their own home can do so, and that those who wish to rent are able to do so at an affordable rate. That is why the government is introducing and implementing new measures to make homes more affordable.
The Housing for All plan commits to 33,000 new units per year, on average, up to 2030. This includes over 10,000 social homes and an average of 6,000 affordable homes to be made available every year, for purchase or for rent. These will be provided by local authorities, Approved Housing Bodies and the Land Development Agency (LDA).
Among the main actions under this pathway committed to or delivered are:
- The First Home Scheme, which was introduced in July 2022, to make it easier for first-time buyers to afford a new home. Since its introduction, almost 800 Approval Certificates have been issued to date . In 2023, approximately 2,000 affordable homes are to be supported by a €50m in Government investment.
- Local Authority Affordable Purchase schemes, making newly-built homes available at a reduced price for first-time buyers.
- The Local Authority Home Loan, which enables successful applicants to borrow up to 90% of the market value of the property or of the purchase price for Affordable Housing scheme.
- Extension of the Help to Buy scheme to the end of 2024. This scheme has helped 37,000 to buy their first home.
- The Project Tosaigh Scheme, which is managed by the LDA, is a market engagement initiative aimed at accelerating delivery of houses on sites with full planning permission that are not being developed by private sector owners due to financing and other constraints.
- Introduction of indefinite tenures (that is, tenancies with no time lengths) for rent leases.
- Rent Pressure Zone (RPZs) protections have been extended to the end of 2024. Allowable rent increases are capped at 2% per annum in RPZs when general inflation is higher than 2%.
- Support Approved Housing Bodies (AHBs) to deliver Cost Rental homes by increasing the Cost Rental Equity Loan from a maximum of 30% to up to 45% per project.
- Increase the Affordable Housing Fund grant from a maximum of €100,000 per unit to up to €150,000 per unit for local authority affordable homes.
- Review the operation of the private rental sector and report on policy considerations ahead of Budget 2024.
- The introduction of a Rent Tax Credit in support of affordability. This was introduced in 2023.
- Enhancement of the amount allowed for Pre-Letting Expenses for landlords. The amount that may be claimed per premises has been doubled to €10,000 and the period for which a premises must be vacant has been reduced from twelve to six months
- Explore options for appropriate tenancy agreements related to shared student accommodation. (Currently one lead tenancy is required for shared provision).
Taken together, these measures will enable thousands of individuals and families to own their own home in the near-term. It will also reduce the pressures on thousands of people renting who currently face uncertainty about their future.
Read this pathway of ‘Housing for All’ in full.
Housing for All: A New Housing Plan for Ireland - Pathway1
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On 7 March 2023, the government announced additional measures to increase the supply of social homes to coincide with the phasing out of the winter eviction ban in accordance with the terms of the Residential Tenancies (Deferment of Termination Dates of Certain Tenancies) Act 2022.
This Act provided for a stay on eviction notices for the period up to 31 March 2023, with deferred tenancy terminations taking effect over a staggered period from 1 April to 18 June 2023.
Read more about the additional measures to increase supply of social homes
Since 01 March 2023, the limits of prices of homes eligible for a Local Authority Home Loan and income limits of those eligible to apply for a loan have increased. This means more people, across all Local Authorities, will be eligible for a State backed mortgage. Supporting home ownership is a key objective for the government and the increase in house price limits, coupled with the increase in income limits, will result in more people buying their own home.
Read more about the changes to the Local Authority Home Loan
As of 08 December 2022, Mortgage to Rent (MTR) applications approved across the country have passed the 2,000-mark milestone since the scheme’s commencement. Minister O’Brien has urged anybody who is at risk of losing their home to consider the scheme and also engage with the other government supports and advice available.
Mortgage to Rent helps people who are at risk of losing their homes due to mortgage arrears. The 2,000 cases completed to date (since the scheme commenced in 2012) are benefitting 5,910 people (3,249 adults and 2,661 children).
On 27 October 2022, Minister O’Brien welcomed the passing of the Residential Tenancies (Deferment of Termination Dates of Certain Tenancies) Bill 2022 by both Houses of the Oireachtas. The Bill, once signed into law by the President, will defer ‘no fault’ tenancy terminations that are due to occur during the coming winter months from taking effect until after 31 March 2023.
On 27 September 2022, significant ongoing investment in housing, local government and heritage was announced, as our Ministers unveiled a budget package for 2023 of €6.3 billion . Housing for All, the government’s national housing plan, will receive continued record investment in 2023 with more than €4 billion in funding for housing.
The Minister for Finance, Paschal Donohoe TD, also announced a number of significant housing measures under Budget 2023:
- the Help-to-Buy scheme has been extended, at current rates, until the end of 2024
- the government is introducing a new rent tax credit valued at €500 per year
- the pre-letting expenses regime for landlords has been enhanced
- the government is introducing a Vacant Homes Tax to increase the supply of homes for rent or purchase, to meet demand.
On 21 September 2022, Ministers announced the ‘Ready to Build’ Scheme. The scheme, which will be funded under the Croí Cónaithe (Towns) Fund, will see local authorities make available serviced sites (that is, sites with the necessary infrastructure such as electricity, water and wastewater) in towns and villages to potential purchasers who wish to build their own home.
The sites will be sold at a discounted rate of up to €30,000 from the market value. The discount will be determined by the cost of servicing the site.
Many areas in towns and villages of all sizes face the blight of vacant and undeveloped sites, which, if brought back into use, could add real vibrancy to those communities. The scheme fulfils a commitment in the government’s Housing for All plan, and supports the Our Rural Future policy and the recently published Town Centre First policy, which aims to tackle vacancy, combat dereliction and breathe new life into our town centres.
On 7 July 2022, First Home, a new scheme, was set up to make it easier for First-Time Buyers to afford a new build home as part of the government’s Housing for All plan, opened for applications. The €400 million affordable purchase scheme has been designed in conjunction with mortgage providers and Banking and Payments Federation Ireland (BPFI). It aims to bridge an existing affordability gap by providing buyers with part of the purchase price for their home, in return for the scheme taking a minority equity stake.
The maximum stake that the scheme will take is 20 per cent, if the buyer is also availing of the government’s separate Help to Buy scheme, and 30pc if Help to Buy is not used. The scheme is available initially to first-time buyers and other qualifying homebuyers who are taking out mortgages from AIB (including its EBS and Haven Mortgages businesses), Bank of Ireland or Permanent TSB. Other mortgage providers may join the scheme in the coming months. It is open to buyers of newly-built houses and apartments in private developments. Applications can be made today online at www.firsthomescheme.ie.
On 9 June 2022, a progress update on the planning measures introduced one year ago to increase home ownership and restrict the practice of bulk purchasing by institutional investors was published. It demonstrates that almost 16,000 residential units have been ring-fenced for individual buyers and restricted from bulk buying or multiple sales to a single purchaser.
As of 4 January 2022 the Local Authority Home Loan has been revised and expanded. A key improvement of the new revised home loan is an increase to the income ceiling for single applicants by €15,000 to €65,000 in counties Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow. In addition, the interest rate has been reduced by 0.25%.
On 14 December 2021, the Planning and Development (Amendment) (Large-scale Residential Development) Bill 2021 became law. The Act gives a legal basis to guidelines aimed at ensuring new houses and duplex units in housing developments are not bulk-purchased by commercial institutional investors in a way that excludes individual purchasers and/or social and affordable housing.
On 11 December 2021, the Residential Tenancies (Amendment) Bill 2021 became law. The Act addresses long-term security of tenure by introducing tenancies of unlimited duration. This means that after six months’ duration, new tenancies will be established for an unlimited duration and not subject to expiry at the end of a six-year term, at the discretion of the landlord.
On 9 December 2021, the Residential Tenancies (Amendment) (No. 2) Bill 2021 was passed by both Houses of the Oireachtas. The legislation caps rent increases in Rent Pressure Zones (RPZs) at inflation or 2% per annum whichever is lower.
RPZs are located in parts of the country where rents are highest and rising, and where households have the greatest difficulty finding affordable accommodation. Under Housing for All, the Government’s plan for housing to 2030, the operation of RPZs has been extended until the end of 2024.
Pathway to Supporting Homeownership and Increasing Affordability: Factsheet
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Housing for All: ‘First Home’ Shared Equity Scheme - Infographic
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Housing for All: ‘First Home’ Shared Equity Scheme Infographic - Accessible Version
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Housing for All: Local Authority Affordable Purchase Scheme - Infographic
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Housing for All: Local Authority Affordable Purchase Scheme Infographic - Accessible Version
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Housing for All: Cost Rental Scheme Infographic - Accessible Version
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Housing for All - Local Authority Home Loan Scheme - Infographic
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Housing for All - Local Authority Home Loan Scheme Infographic - Accessible Version
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