Simon Harris: Funds 'swooping up' estates an unintended consequence of policy

Minister says private investments funds did increase housing supply, but it was never intended that they would purchase entire housing estates 

Simon Harris: 'We needed to go through every avenue to increase supply.' File picture: Niall Carson

Investment funds “swooping” in and buying housing estates is an unintended consequence of Government policy and will not be tolerated, Minister Simon Harris has said.

The Government is reeling since the weekend when it was reported that a global property investment firm with a €1bn war chest has pushed out first-time buyers by purchasing most of a 170-home estate in Kildare.

The developers of the Mullen Park estate in Maynooth had been marketing new homes to private buyers since last year, with around 35 sold so far, the Business Post reported.

Real estate investment trust Round Hill Capital has agreed to buy up to 135 three- and four-bed homes on the estate so that they can be put on the rental market. 

The homes were on sale for around €400,000, meaning the value of the deal could be around €54m.

Despite promises that what happened in Maynooth will not happen again, senior government sources have indicated that an outright ban on investors buying homes in housing estates would raise constitutional difficulties. 

It is believed that tackling the issue will centre on changes to current tax incentives.

Green Party leader Eamon Ryan said it is a legally complex issue and "may require legislation".

Housing Minister Darragh O’Brien and Finance Minister Paschal Donohoe are scrambling to develop proposals to limit the ability of these investment funds to buy up such properties in time for Cabinet approval next week.

Planning regulations are also set to be reviewed with a view to ensuring that at least 30% of homes in new housing developments are set aside for first-time buyers. 

A further 20% of homes on these developments would be social and affordable houses. 

Government seeks to 'level the playing field'

Mr Harris, the further and higher education minister, said the Government wants to level the playing field for first-time buyers.

He told RTÉ radio today that private investments funds did increase housing supply, but it was never intended that they would purchase entire housing estates. 

Mr Harris accepted it was Fine Gael policy to encourage private investment developments in order to stimulate the market a decade ago, following the financial crash.

"We needed to go through every avenue to increase supply,” he said.

It was never the intention, nor can it be tolerated, that private investment funds would be swooping up housing estates. 

Mr Harris said the proposals put forward by Mr O'Brien are backed by all three Government parties.

Earlier, Mr Ryan said he did not think what happened in Maynooth is a widespread problem.

He said no more than 100 or 200 houses are being bought up by investor funds, but said it is important to prevent it from becoming a bigger issue.

Mr Ryan said regulations can be set within planning permission to restrict the practice but that any changes to the law will be as part of the Affordable Housing Bill.

In the Dáil yesterday, Taoiseach Micheál Martin promised that the Government would immediately deal with the "unacceptable" situation where first-time buyers are being forced to compete with institutional investors for homes.

The shortage of housing was back in the political spotlight last night as both Fianna Fáil and Fine Gael politicians held party meetings.