SINN Féin representatives have branded the government’s local authority housing loan scheme a ‘complete failure’ after figures from the Department of Housing showed only 19 loans had been finally approved in Cork City under the program in 2021 and in the first quarter of 2022.
Sinn Féin TD for Cork North Central Thomas Gould and Sinn Féin Councilor for Cork South West Eolan Ryng have called on Housing Minister Darragh O’Brien to clarify ‘why so few local authority house loans are approved in the town of Cork”.
Figures released by the Department for Housing, Local Government and Heritage show that 19 home loan applications have been finally approved in Cork over 15 months – 13 in 2021 and six in the first three months of 2022.
The Local Authority Housing Loan Scheme offers government backed mortgages for first-time buyers and new applicants, which can be used to buy new or used property or for self-build.
The loan is designed to provide up to 90% of the market value of the property, with the maximum loan amount determined by the location of the property.
‘Lack of funding, red tape and unaffordable accommodation means the Rebuilding Ireland home loan, now called local authority home loan, is a complete failure,’ Mr Gould said.
“The reality is that the Rebuilding Ireland home loan is advertised as a last resort option for those struggling to buy a home.”
The loan was promised as something to help people unable to get a mortgage, he said.
“We know there are thousands of these people and families in Cork.
“These are the people for whom home ownership is becoming an increasingly distant dream.”
Mr Gould noted that of the 694 approvals nationwide in 2021, only 13 were for Cork City, which was less than 2% of all loans approved.
“It must be admitted that 694 loans is a dismal 12 month result nationally but, to make matters worse, in the 2022 figures to date, only 172 loans have been approved nationally. Only six of the 172 loans approved nationwide in the first quarter of 2022 were in Cork.
“We have a situation where there are thousands of people who desperately need to be able to buy a house, but the government is not offering them any support.
“Since the scheme was set up, 56% of applicants to Cork have been turned down.”
A Department of Housing spokesman said the figures quoted referred to the number of applications that reached the final approval stage of the loan process.
“This means that a home has been identified and final approval has been given for a mortgage drawdown on that specific home, subject to normal lending terms,” the spokesperson said.
“It is important to note that progress to the final approval stage is dependent on the applicant’s success in selling a specific home, which is beyond the control of the local authority.
“The number of applications that receive approvals in principle would be significantly higher than the number of applications that receive final approval.”
Mr Ryng said Cork City was clearly below the national average when it came to approvals for Rebuilding Ireland home loans.
“This is extremely worrying given the depth of the housing crisis here in Cork and underscores a serious need for Cork City Council to fund the scheme,” Mr Ryng said.
“It’s a broken pattern, it doesn’t work anywhere but it certainly could work better in Cork City.”
A spokesman for the Department of Housing said €250 million in loans had been authorized for the local authority housing loan scheme in 2022, an increase of €50 million from 2021.
“Nationally, it helped more than 2,860 households gain access to homeownership between 2018 and the first quarter of 2022.
“Given that the program is aimed at low-to-moderate income households who would not have been able to find sufficient financing from a commercial lender, this represents over 2,860 households who would otherwise not have been able to purchase a house without the program. ”