State body trebled loan approvals to homebuilders in six months
Covid support fund drives growth as HBFI loan approvals rise to €340m
The State-backed entity set up to fund the delivery of new homes trebled loan approvals in the six months to July 2020, driven by a fund intended to address a gap in the market caused by the Covid-19 pandemic.
Home Building Finance Ireland (HBFI) said loan approvals were €340 million in the six months to July 2020, up from €114 million.
The organisation said the Covid housebuilding fund had also been extended by €100 million, following high levels of interest.
By the end of July, HBFI had approved funding for 1,477 new homes in 29 developments, with social housing projects accounting for 34 per cent of the new homes.
“HBFI was set up to improve the supply of new homes - for buyers, renters and people who need social housing. We have a lot more to do but we have continued our strong progress during 2020 and are now committed to funding almost 1,500 new homes in 29 developments in 16 counties,” said HBFI chief executive Dara Deering.
“Housebuilders have experienced unprecedented challenges since the onset of Covid disruption and we moved quickly to establish a range of effective supports to ensure continuity in the supply of new homes. We will continue to engage with the sector to bring forward additional solutions to support housebuilding in due course.”
More than 90 per cent of the initial €200 million Momentum fund, which had been set up specifically to help housebuilders commence large housing developments in prime locations, had been committed within three months of its launch.
Minister for Finance Paschal Donohoe TD, said it was appropriate to increase the Covid support scheme.
“Based on the figures released by HBFI today, it is evident that interest in their Momentum Fund product has been very strong since its launch, with over 90% of the fund already committed. Absent the availability of this funding, it was likely that the commencement of construction on these sites would have been delayed, resulting in delays in the delivery of new homes,” he said. “While traditional lenders continue to navigate their way through the impacts of Covid-19, I feel it is an appropriate step by HBFI to increase their Momentum Fund by a further €100 million at this time to ensure funding is available for these housing schemes over the coming months.”