Planning delays may raise house prices

UNWORKABLE legislation and delays in planning may push up further the price of new houses, the Irish Home Builders Association warned yesterday.

The tax take for the exchequer would also be affected, it warned, adding that the association was seeking a meeting with the Government to discuss the matter.

It is estimated that the exchequer receives more than 25% of the average new house costing 190,000. Average house prices are increasing at a rate of less that 1%, with the increase in second-hand house prices averaging 7.4%.

The association claimed that planning permissions for 44,000 houses and apartments, 21,000 of which were in the greater Dublin area, would expire at the end of the year.

This would occur due to a clause in the Planning and Development Act, which stipulates that approval would “wither” within two years of being granted.

Planning approvals for a further 35,000 housing units could wither next year if the legislation was not changed, the IHBA claimed.

IHBA director Ciaran Ryan said planning applications by local planning authorities were also subject to delays. This, and delays in the planning appeals system, were holding up the construction of new houses throughout the country.

“The combination of these factors could result in a shortage of supply and put upward pressure on new house prices,” Mr Ryan said.

“We are hoping to meet with the Minister for the Environment, Martin Cullen, to discuss what is becoming a major problem in the supply of new houses throughout the country,” he said.

“The impact of the withering of planning permissions and the widespread delays in planning processes, generally, will seriously impact on the capacity of the building industry to maintain an adequate supply of housing constant with demand.”

The IHBA was proposing that a five-year lifetime was more appropriate than the current two-year regulation.

There were now major bottlenecks in planning and the IHBA said further investment in resources was necessary in planning at a regional and national level.

“Resources need to be directed towards staffing levels, training and recruitment, professional development and management systems. Investing in an efficient and professional planning system is cost-effective public spending,” Mr Ryan said.

The IHBA hoped solutions would satisfy both the IHBA and the Government.

“The construction industry is a major driver of the Irish economy and the IHBA want to continue to play its role in meeting the housing demands in the market place,” Mr Ryan said.