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Housing charity proposes new way for Government to buy homes for social housing

  in ICSH News

Housing Charity proposes new way for Government to buy homes for social housing

The Irish Council for Social Housing (ICSH), the national social housing federation, is urging the Government to seize the current market opportunity to enable homes to be purchased from the market for social housing.

Donal McManus, ICSH Executive Director, stated “there is a golden opportunity for housing associations to purchase homes at an average 40% discount from peak prices that can provide much needed social housing”. He added “there are over 56,000 households waiting for a home and given that capital spending has been significantly reduced we urgently need to find a way of providing housing”.

The ICSH is proposing that the Government back a new model of financing social housing which will involves the following:

  • Housing Associations borrow money from financial institutions to purchase homes on the market.
  • The Government will provide an equity stake up-front and enter into a long-term lease agreement with the Housing Association for the units.
  • This lease payment will help the housing association repay the mortgage and rent collected from tenants will be used for management and maintenance of the stock.
  • Finance borrowed from private institutions by housing associations is not deemed to be exchequer spending for the purpose of Government borrowing and so this is not a constraint on the Government.

According to Mr. McManus “there are a number of benefits to the state for backing this option. The cost to the state is spread over 20 years unlike the traditional up-front capital spending programme and the advantage of this model over other lease-type arrangements is that the stock stays permanently in the social housing sector rather than having to be returned to the developer/landlord at the end of the lease”.

Mr. McManus concluded “if we access the properties controlled by NAMA we could be looking at up to 80% savings. Housing associations could provide general-needs family housing through this model and assist in meeting the needs of those on social housing waiting lists.”

Ends

For further information contact Donal McManus on 01 6618334.