Revealed: One in five new-build homes is now being snapped up by State

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Revealed: One in five new-build homes is now being snapped up by State

Rather than building their own properties, councils and housing bodies are purchasing more than funds


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The State is squeezing out first-time home buyers by snapping up new homes rather than building their own.

Official figures show approximately one in every five newly built residential properties was snapped up by a combination of local authorities and taxpayer-funded housing bodies last year.

In some counties the State is snapping up more than half of all new homes in estates.

And it is typically competing against first-time buyers at the same price points.

Housing experts claim county councils could build homes cheaper.

Expert in housing policy Lorcan Sirr has dubbed the State’s actions as akin to that of a magpie – a bird that is notorious for taking things off others.



Crisis: Housing Minister Eoghan Murphy. Photo: Frank McGrathCrisis: Housing Minister Eoghan Murphy. Photo: Frank McGrath

Crisis: Housing Minister Eoghan Murphy. Photo: Frank McGrath

He said that taxpayer funds being used to buy houses meant councils were not ramping up capacity to build.

Dr Sirr warned: “There are also likely political consequences for those who stand in the way of home-ownership.”

In response, the Department of Housing claims it is buying homes offered by investment funds that are not normally offered on the open market for individual sale.

There has been huge controversy about the activities of cuckoo funds. These are international investors who snap up entire developments to rent out, thereby locking out first-time buyers and young families from buying their own home.

But figures from the Department of Housing show the State is buying far more newly-built houses than any cuckoo fund.

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These new houses are known as “turnkey” houses – when the State buys new housing from a developer before it hits the market.

Last year there were 18,072 new houses and apartments completed.

Excluding one-off houses and 1,644 homes built by councils means the total falls to 11,373. Some 2,100 turnkeys were bought by local authorities and approved housing bodies, which are mostly State-funded.

This means 18pc of completed new builds last year were bought by the State, or nearly one in five.

Cuckoo investors block-purchased almost 3,000 units last year, but most of these properties were bought off the plans and have yet to be constructed. About 700 were completed homes.

The means the State was the largest purchaser of completed homes last year.

Overall, cash buyers – such as the State, cuckoo funds and investors in buy-to-let housing – accounted for half of all residential properties bought last year, according to the Central Bank.

The pressure exerted by this is one of the reasons half of new buyers will need help from mum and dad to buy their own home.

A Department of Housing spokesperson responded that it was too simple to say that it is pushing out first-time buyers.

“The notion that turnkeys are homes that are completed and the State simply buys the keys is untrue.

“In many cases the local authority is involved from the very start and the houses would not be built without the involvement and funding of the local authority.”

In some areas the local authority may not have land in places suitable for social homes.

“These homes are not being bought in a shrunken market – they are directly expanding the market because they are new homes built by and for the local authority/approved housing bodies,” the spokesperson said.

And they insisted that in some areas, acquisitions are both faster and cheaper to deliver.

Irish Independent

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