Huge drop in State-backed loans for first-time buyers

Sinn Féin spokesperson on housing Eoin Ó Broin. Picture: Gareth Chaney/Collins

Applications and approvals for State-backed home loans have fallen by almost 50% this year.

Sinn Féin housing spokesperson Eoin Ó Broin has sounded his concern around the slump in both the number of applications and approvals for the Government's Rebuilding Ireland home loan scheme in the first nine months of 2020 compared to the same period last year.

"Up to September 2020, 1,084 valid applications have been assessed and 495 have been recommended for approval — 46%," said Mr Ó Broin, after receiving the information through a parliamentary question.

“If you compare these figures to the same period in 2019, where 1,864 applications were assessed with 940 for approval, there are 42% fewer applications and 47% fewer approvals.

“It is clear that first-time buyers in 2020 are not applying for or being approved for the Rebuilding Ireland Home loan in as many numbers as they were in 2019."

The Government-backed mortgage scheme for first-time buyers was introduced in 2018 and is administered by local authorities.

Budget 2021 will make €210m available for lending next year  under the scheme.

Mr Ó Broin criticised the fact that the full breakdown of the figures on home loans for the first three quarters of 2020 has yet to be published.

“Unfortunately, the department does not provide drawn-down figures, so it is impossible to know of the loans approved — how many households are actually drawing down the loan amount offered," he said.

“From these initial figures for 2020, it looks like first-time buyers on lower incomes, for whatever reason, are not applying for a home loan product that was supposed to increase access to the housing market."

Responding to Mr Ó Broin, housing minister Darragh O'Brien said each local authority has a credit committee that makes the final decision on applications for loans, in accordance with the regulations, and having regard to the recommendations made by the Housing Agency.

The scheme is available to single applicants with an annual gross income of €50,000 or less, or €75,000 or less combined for joint applicants.