Election 2024Analysis

Voters’ choice on rival affordable housing plans comes down to State owning land or stake in the home

Competing proposals from Sinn Féin and Fine Gael/Fianna Fáil have predictably sparked claim and counterclaim

Eoin Ó Broin: has accused the outgoing government parties of 'misrepresenting' Sinn Féin's housing proposals. Photograph: Brian Lawless/PA Wire
Eoin Ó Broin: has accused the outgoing government parties of 'misrepresenting' Sinn Féin's housing proposals. Photograph: Brian Lawless/PA Wire
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Cormac McQuinn
Wed Nov 13 2024 - 06:00

Sinn Féin has been attacked by both Fianna Fáil and Fine Gael over its plans to deliver affordable homes. It is a complex area and the competing proposals from the main opposition party and the main parties from the outgoing government have sparked claim and counterclaim. Voters, particularly first time buyers, will have to decide who they are most convinced by.

Sinn Féin’s proposal

Sinn Féin has pledged to deliver affordable housing for eligible purchasers at prices between €250,000 and €300,000. The State would retain ownership of the land the homes are built on and there would be conditions on the sale and rent of the property. According to Sinn Féin, separating the cost of land and site servicing from the cost of building the home will bring prices down. Sinn Féin’s housing spokesman Eoin Ó Broin says this is “the only way you can deliver those homes at that price”.

Attacks from rivals

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Both Fianna Fáil and Fine Gael have questioned whether lenders will provide mortgages to people buying homes when they do not own the land. During an RTÉ debate on Monday night, Fine Gael’s Paschal Donohoe challenged Ó Broin, saying: “Where is the commitment that the banks will lend to your plan?”

Ó Broin in turn has accused the outgoing government parties of “misrepresenting” the proposal. He said banks do not give memorandums of understanding to opposition parties, but that he has met the banking sector representative body Banking and Payments Federation of Ireland (BPFI) on two occasions and it has said: “very clearly and publicly they will lend for mortgages for this scheme on the same basis as any other Government scheme”.

On Tuesday, Fianna Fáil Minister for Housing Darragh O’Brien stepped up his own assault on Sinn Féin’s plan calling on the party to answer a series of questions. These include whether Sinn Féin has received confirmation in recent weeks that commercial banks will lend under the scheme. Ó Broin did not address these questions directly when asked about them by The Irish Times. He referred to Sinn Féin’s meetings with the BPFI, saying it “set out what their members would need in order to provide mortgages to purchasers of our affordable homes scheme. We are absolutely confident that our scheme will meet these requirements”.

The banking sector’s view

The BPFI said its position “remains unchanged” since it chief executive Brian Hayes was asked about Sinn Féin’s plan by RTÉ in September. Hayes said at the time that it had been a “good discussion” with Sinn Féin. He said that “at no stage was there a memorandum of understanding between the banks and Sinn Féin” and the proposals “would require further consultation”.

He said one issue raised by the BPFI was that banks extending mortgages to a purchaser would need “good and marketable title” and that Sinn Féin accepted that. The BPFI statement said it “remains committed to working with any future government to improve the supply of housing”.

Ó Broin said on Tuesday: “Where someone who has bought an affordable home and wilfully defaults on their mortgage the banks will have a charge on the land. However, where they have fallen into mortgage distress through no fault of their own the State will step in and consider buying out the mortgage so the property could become a social or cost rental tenancy.”

He also said the banks have indicated an interest “in lending into the Local Authority home loan, to provide mortgage funding for this scheme for those unable to access bank mortgages”.

He accused the rival parties of “trying to distract from the fact that our scheme will deliver genuinely affordable homes for working people at prices from €250,000, with no hidden equity charge”.

Fianna Fáil and Fine Gael’s plans

Both Fianna Fáil and Fine Gael are promising to extend and expand the outgoing government’s affordable housing initiative, the First Home Scheme (FHS). Under the shared equity scheme, the government and participating banks pay up to 30 per cent of the cost of the new home in return for a stake in it.

The scheme is open to first-time buyers and it is designed to bridge the gap between the purchaser’s deposit and mortgage and the cost of the home. If the homeowner wants to sell or rent out the property they must pay off the equity share. Both Fianna Fáil and Fine Gael are promising to extend the FHS to 2030 and expand it to second-hand homes and well as to extend the separate Help-to-Buy scheme for first time buyers.

The choice for voters

Sinn Féin is critical of the equity stake in the FHS and has said it would end that scheme and phase out Help-to-Buy which is says puts upward pressure on house prices, a contention O’Brien disputes.

During the debate on Monday, he responded to a charge from Ó Broin that Fianna Fáil and Fine Gael are trying to outdo each other with “reckless policies” by accusing Sinn Féin of planning to scrap €100,000 in existing supports for first-time buyers.

The choice for voters on the competing affordable homes schemes is between Sinn Féin’s plan, where the State will own the land the house is built on, or extending the existing scheme where the State has a stake in the home. People trying to get on the property ladder will carefully weigh up the pros and cons of each proposal.