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So far this year, more than half of applications made under the government’s local authority housing loan scheme have been rejected.
The scheme, which provides state-backed mortgages to first-time buyers and new applicants who have been refused a mortgage or offered insufficient financing from traditional lenders, is one of many government initiatives aimed at helping people get on the property ladder.
It offers mortgages of up to 90% of the market value of the property. The Housing Agency assesses the applications, but the competent local authorities have the final say.
Figures obtained from the Ministry of Housing show that of the 1,310 applications received and assessed between January and the end of June this year, 586 were recommended for approval while 724 (55% of the total) were recommended for rejection.
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Cork County Council received the most applications (144), followed by Dublin City Council (117), South Dublin (88); Louth (85) and Fingal (84).
The Local Authority Home Loan scheme, which came into effect this year, succeeded the similar Rebuilding Ireland Home Loan scheme.
Figures provided by Housing Minister Darragh O’Brien, in response to a parliamentary question from Sinn Féin’s Eoin Ó Broin, show that 2,581 applications were received under the Rebuilding Ireland Home Loan scheme in 2021, of which 1 329 or 51% were recommended for approval.
Some 228 applications under the Rebuilding Ireland Home Loan scheme were assessed in 2022 and 101 were recommended for approval. Although no new applications for Rebuilding Ireland home loans are currently being accepted, applications already in progress are honoured.
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“The Local Authority Mortgage Loan has been available nationwide from Local Authorities since 4 January 2022. Previously, the Reconstruction Ireland Mortgage Loan was the mortgage available from Local Authorities,” Mr. O’Brien.
“The Housing Agency provides a central support service which assesses applications for Rebuild Ireland Housing Loans and its successor, the Local Authority Housing Loan Scheme, on behalf of local authorities and make recommendations to authorities to approve or deny requests.”
“Each local authority must have a credit committee and it is up to the committee to decide on loan applications, in accordance with the regulations establishing the scheme and the credit policy underlying the scheme, taking into account the recommendations made by the Housing Agency,” he added.
House price inflation in the Republic slowed for the second consecutive month in May amid signs of a market slowdown in the face of rising living costs. June figures are due out later this week and should show a further slowdown in price increases.
Cost of living issues combined with higher interest rates – major central banks have raised rates – have triggered slower growth and even price contraction in some other jurisdictions.