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Families 'locked out' of buying affordable homes - council chief

Middle-income earners are left trapped in the rental sector

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Concerns: Paul Reid, CEO of Fingal County Council. Photo: Tony Gavin

Concerns: Paul Reid, CEO of Fingal County Council. Photo: Tony Gavin

Concerns: Paul Reid, CEO of Fingal County Council. Photo: Tony Gavin

Middle-income families searching for affordable homes are being "locked out" of the property market as they cannot get a mortgage.

That is according to the chief executive of one of the country's largest local authorities, Paul Reid, who heads up Fingal County Council.

Mr Reid told the Irish Independent that a large number of families in rented accommodation were being squeezed out of being able to afford homes because they can't save for a deposit.

He said that these families are above the €75,000 per annum threshold, meaning they cannot qualify for the Rebuilding Ireland home loan scheme, which provides lower interest mortgages to those who have been turned down by banks. It allows eligible buyers to borrow up to €288,000.

An Irish Independent analysis of the Property Price Register previously showed that last year just 40pc of the housing units sold in the capital were priced at €320,000 or less. This is the threshold the Government says is "affordable" if buying in the bigger urban areas.

Mr Reid said while the market had been stuck at the developers' end, it is now stuck at the borrowers' end too, as councils attempt to tackle a spiralling housing crisis.

"So while you have a lot of these active developments, you don't have queues out the door which you'd expect. We have homes in Balbriggan for sale, new developments, very nice developments €260,000-€280,000 certainly at the better end of affordable that you'd see around the place, but not flooding in at the door either.

"Borrowers who are in the rented sector can't save up to the extent they need for the deposit and they're over and above the qualification for the Rebuilding Ireland home loan. So there's that market that's in the middle that's just over it.

"They can't apply for the Rebuilding Ireland loan, they're above it, they are renting, can't save up the other bit."

To qualify for this loan, a single person must be earning less than €50,000 per annum, while a couple cannot exceed the €75,000 mark.

He suggested stronger funding sources for developers to get the market going at a faster rate, but added: "And equally the borrowers' capacity to borrow, there's a lot of people still locked out."

The Fingal boss - who previously worked in central government - recently hit back at a letter from Housing Minister Eoghan Murphy over the four Dublin councils' work in addressing the homelessness crisis.

Despite insisting he has a good relationship with Mr Murphy and that funds are released quickly for housing projects, he has called on the minister's department to loosen the shackles on local authorities to help speed up the building process.

He said more services should be devolved to local authorities, saying there has been a "parent-child relationship" between central and local government.

"There can be a lot of duplication between us doing something and an equivalent set of architects in the department looking at it and going back to us. I wouldn't say it's held us up hugely, I've heard more of it from other local authorities in the country."

He said that central government is good at developing policy and advising the minister, but less good at implementing things, which he believes is a key strength of local authorities.

"There's not strong competence across many departments with the exception of revenue maybe and social protection of implementing, doing.

"Local government by contrast, their strongest expertise is doing and implementing. We're probably weaker on evaluation and options and economic assessment and impact but we're actually good at doing."

In Fingal, one of the major challenges over the coming years will be how it deals with the integration of different cultures in the area.

Mr Reid acknowledges they are in a unique position given the large proportion of foreign nationalities that have moved in recent years to areas such as Blanchardstown and Balbriggan.

Irish Independent