BoI provides €2bn for house buyers

Bank of Ireland hasestablished a new €2bn fund aimed at first-time buyers and people looking to move house following the news that house prices have been increasing.

The bank is looking to unleash pent up demand for houses that is being brought about by a shortage of housing stock in certain areas of the country.

Director of consumer banking with Bank of Ireland, Gavin Kelly said that the increase in the number of people working has helped stimulate demand for houses.

“We’re seeing strong evidence that residential property prices continue to stabilise, as are incomes and the number of people in employment. These factors are contributing to improved consumer sentiment and an increase in the number of people considering the purchase of a home or changing home,” he said.

It is clear from provisions made by Bank of Ireland that they are targeting the Dublin market. The bank is planning to open three of its Dublin branches at 8am in the morning to facilitate people as well as a new ‘Anytime, Anywhere’ campaign which will see mortgage managers meeting customers at a time and place that suits them.

The recent increase in housing prices was largely driven by a shortage of stock in the Dublin area driving up prices. The number of new houses built in Ireland have collapsed from more than 93,000 in 2006 to less than 4,000 in the first six months of 2013.

Head of research at Lisney estate agents said that “demand is outstripping supply in the Dublin market with the number of properties available for sale falling by a third over the past 18 months. We are simply not building enough houses in the Dublin,” she said.

Mr Kelly pointed to the increased levels of people renting as an indicator that people need to buy homes.

“The continued strengthening of consumer sentiment and the pent up demand from people who have been renting for the last number of years but aspire to own their own homes are also good indicators for increased mortgage activity,” he said.

Rachel Doyle from PIBA said there was a chance Nama could release houses on to the Dublin market which could meet some of the demand for starter homes.

“Nama could release houses and that could impact on demand,” she said.