It's been
a confusing week for buyers, sellers and for any homeowners trying to keep up
with property news. The Government
released their Rebuilding Ireland:
Action Plan for Housing and Homelessness, ahead of schedule.
The plan
follows on from earlier reports and manifestos such as Construction 2020 – A Strategy for a Renewed
Construction Sector and the Social
Housing Strategy 2020, both published in 2014 and not implemented by
previous government.
So what does it all mean...
The Rebuilding Ireland project is made up of five pillars - to address homelessness; accelerate social housing; build more homes; improve the rental sector and utilise existing housing.
Pillar 1 – Address Homelessness
This section of the plan sets out the government intention to provide early solutions to address the high level of families in emergency accommodation; to deliver supports for people who are currently homeless and to enhance State supports to keep people in their own homes.
Pillar 2 – Accelerate Social Housing
This section outlines plans to increase the level, speed and cost of delivery of social housing and other State-supported housing. Social housing funding of €5.35bn is being made available to create 47,000 units by 2021.
Pillar 3 – Build More Homes
This is the main section that home buyers and sellers will be focusing on. It deals with initiatives to increase the output of private housing to meet demand at affordable prices. The chronic lack of supply is not only affecting homelessness and social housing issues, but it has a very real effect on the private housing and rental sectors. The target is to build 25,000 new homes every year until 2020 - this is expected to take 12 months to ramp up.
Pillar 4 – Improve the Rental Sector
This is another important section of the plan, but arguably it doesn't goes far enough to really impact the market. It does address many of the current obstacles to delivering affordable houses and apartments in the private rented sector but the solution comes back to suppl. Until we build more units, we cannot use them, irrespective of whether that is for the social, private or rental sector.
Pillar 5 – Utilise Existing Housing
The final section of the plan ensures that existing housing stock is used to the maximum degree possible - focusing on measures to use vacant stock to renew urban and rural areas through 14 definitive action, including allowing change of use of commercial buildings into residential units.
Some
industry commentators were surprised at the lack of focus on finance and
funding, but the reality on the ground is that mortgage approvals have not
changed significantly in recent years but drawdowns are down 33% so far this
year. This does not indicate that
finance is unavailable to house-hunters, but rather that they are making their
mortgage applications and then not going ahead with their purchases. We do not know whether this is due to a change of mind,
or lack of a suitable home in the right location at the right price, all we can
say for certain is that access to mortgages is not the issue.
Some frustrating statistics came out of the research supporting
this report/plan, for example, there is currently planning permission granted for
27,000 homes to be built in Ireland but only 18% are under construction.
As with every Government plan, a certain amount of scepticism is
natural and probably sensible; however, this does feel like a strong proposal
that is likely to be achievable for the main part. A Housing Delivery Unit is being established
within the Dept. of Housing, Planning, Community and Local Government (DHPCLG)
to bring all stakeholders together to identify and resolve barriers to delivery
of these new homes and this is where the plan will succeed or fall down. This was a cross party solution so hopefully,
the cooperation and support will help the government to deliver on it.
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