Sinn Féin's housing spokesperson Eoin Ó Broin TD has argued that SME builder-developers need cheaper state-backed finance and access to equity if they are to ramp up housing delivery.

The Dublin Mid-West TD was responding after Minister for Finance Simon Harris announced plans to extend Home Build Finance Loans so builder-developers can purchase zoned land without planning permission.

Teachta Ó Broin said: "Today the Minister for Finance Simon Harris announced his plan to extend Home Build Finance Loans to builder-developers to buy zones land without planning permission. While there is nothing objectionable in his proposal, it does not deal with the real barriers blocking the SME sector building more good quality homes for working people to buy.

"Currently Home Building Finance Ireland (HBFI) development finance is too expensive for many SMEs. Typically, the all-in cost of finance from the state lender is 11%. This is significantly more expensive than standard bank finance and can render smaller developments unviable.

-- Advertisement --

"HBFI has long called for changes to the HBFI legislation to allow them to provide lower cost development loans to SME builder developers when building homes for the owner-occupier market.

"SME builder-developers are also struggling to secure equity for their developments. Where they don't have equity of their own, they have to secure very expensive mezzanine finance which often includes a prohibitive profit share.

"In our alternative budget announced in September, Sinn Féin proposed a new ISF-funded equity product for the SME sector to be delivered through HBFI, charging more competitive rates and without any profit share.

"Lowering the cost of development finance and providing more cost-effective equity would enable the SME builder developer sector to significantly increase their supply. If this was combined with statutory timelines for planning permissions for developments below 100 homes and more timely utility connections, SME builder-developers would be much better placed to significantly increase the supply of good quality homes for working people to buy in every county across the state.

"Instead of taking these kinds of meaningful measures, Simon Harris is just tinkering around the edges with announcements that will have limited impact.

"This appears to be more about the optics of looking like something is being done rather than actually making the radical changes that are required to increase the supply of private homes for sale."