Those seeking to buy housing but who are forced to spend more than 35 per cent of their net disposable income on a mortgage will benefit from the thousands of homes to be built under planned affordable housing schemes.
Up to 10,000 houses to be built under affordable housing schemes will be offered to eligible first-time purchasers from local authorities over the coming years at a significant discount from the market value of comparable houses.
Most of the houses will be built on State lands or sold as part of a deal between local authorities and developers and will be sold at around a third less than their market value.
For example, homes due to go on sale arising from a State land swap with developers on Harcourt Street will result in affordable houses at prices of between €150,000 and €170,000, which would sell on the open market for about €225,000 and €260,00.
These homes will be built in areas such as Tallaght, Clondalkin and Balgaddy and are due to be completed before the end of next year.
The 35 per cent mortgage limit will apply to homes built under the affordable housing initiative, contained in the Sustaining Progress pay deal, and part V of the Planning Act, under which 20 per cent of new private housing estates may be set aside for social or affordable housing.
New income limits are also being drawn up for a separate affordable housing programme, known as the 1999 Affordable Housing Scheme, which results in around 1,000 affordable houses a year.
It is understood that the homes will be open to single-income households which earn up to €40,000.
A different formula will apply to two-income households, which can be reached by multiplying the gross income of the principal earner by 2.5 and adding the gross income of the subsidiary earner. If this amount does not exceed a sum in the region of €100,000, the household would be eligible.
The income limits have been drawn up by officials at the Department of the Environment and are expected to be approved by the Department of Finance shortly. An announcement by the Government is expected in the coming weeks.
Thresholds for local authority loans are also due to be increased for first-time purchasers, who will be able to borrow up to €180,000 towards the purchase of these affordable homes.
While the provision of affordable housing has been slow to date, the Government is seeking to speed up the supply of such homes through the establishment of a new Affordable Homes Partnership.
The group, chaired by former union leader Des Geraghty, will liaise with housing developers and analyse State land banks with a view to providing more affordable housing.
The delay in providing affordable homes is due in part to the Government's dilution of Part V of the Planning Act, which obliged developers to set aside up to 20 per cent of private housing estates for social and affordable housing.
Under pressure from the building industry, developers may side-step the 20 per cent clause by providing money or land to the local authority.
Affordable housing is different to social housing, in that it is the provision of private housing for sale to individuals whose income is inadequate to meet the mortgage payments on a house to meet their needs.
Social housing, on the other hand, is the provision of accommodation by local authorities for rent to people unable to provide housing from their own resources.