Budget 2018: 3,800 social homes to be built next year

Number getting Housing Assistance Payment to increase to 17,000 at cost of €149m

Local authorities and housing bodies are expected to build 3,800 social houses and apartments in 2018 as part of an overall social housing funding package of €1.83 billion.

However, more than five times as many social housing tenants will be accommodated in the private rented sector, with the numbers in receipt of the Housing Assistance Payment (HAP) increasing by 2,000 to 17,000 at a cost of €149 million.

In addition, funding for long-term leasing and other rental arrangements has been increased by €31 million to €115 million, with the aim of securing another 4,000 social homes from private landlords.

In the longer term the Government is adding 3,000 homes to its Rebuilding Ireland housing plan, which had a target of delivering 47,000 homes by 2021.


It also plans to rebalance the plan in favour of more housing construction, with 33,500 of the homes to be built or refurbished, rather than leased, compared to the previous target of 26,000.

Funding for homeless services will be increased by €18 million to over €116 million.

In addition to the 3,800 homes constructed by local authorities and housing bodies, another 1,200 social homes are expected to be provided by developers or through the refurbishment of vacant homes, while 900 will be bought on the open market.

Housing charity Focus Ireland said this figure does not represent an increase on the Rebuilding Ireland target already set for 2018. "It seems that the total number of homes delivered will remain the same as the existing target of 5,900 homes in 2018."


Minister for Housing Eoghan Murphy said he had "reprioritised funding" so that 800 of the 5,900 homes that would have been bought next year will be built instead.

“If you look at what we will build this year it will be about 2,000, so there will be an 1,800 increase in the number of homes built directly by local authorities and housing bodies next year,” Mr Murphy said .

To encourage general housing supply €750 million will be allocated from the Ireland Strategic Investment Fund for a new housing finance “vehicle” to be known as Home Building Finance Ireland (HBFI).

This aims to address the difficulties developers have reported in accessing finance for residential construction, and will be allocated to “commercially viable residential development projects whose land owners want to build homes”.

It has the potential to fund an additional 6,000 homes, said Minister for Finance Paschal Donohoe.

HBFI will “draw on the extensive skill and expertise” of Nama to get up and running quickly, but will have no impact on the ongoing wind down of Nama, he said. Only “non-Nama debtors” will be able to access the fund.

In addition, the €226 million Local Infrastructure Housing Activation Fund, which pays for major infrastructure projects to make privately-owed sites viable for housing, is being topped up by €75 million. Mr Donohoe said this measure would lead to the provision of 5,000 more homes at “more affordable levels”.

Tapered out

The wind down of mortgage interest relief, announced in last year’s budget, will be “tapered out” to 2020 with the continuation of 75 per cent of the existing relief into 2018, 50 per cent in 2019 and 25 per cent in 2020.

Construction Industry Federation director general Tom Parlon said the Home Building Finance Ireland fund may bridge the funding gap "by providing funding at competitive levels where there is an established demand for housing but no lending from traditional sources available".

The Irish Council for Social Housing said while it welcomed the increase in the social housing budget, the reliance on HAP was a concern. “Expanding the HAP programme, which relies entirely on the private rental sector, is worrying as there isn’t enough rental stock out there.”

Olivia Kelly

Olivia Kelly

Olivia Kelly is Dublin Editor of The Irish Times