Social housing rule 'putting home-buyers off'
Potential buyers of expensive new homes are being put off by a Government stipulation that ‘‘affordable’’ housing has to be built nearby, a leading estate agent claimed today.
But Aidan O’Hogan, managing director of the Hamilton Osborne King auctioneers company, insisted that snobbery was not a factor.
He was commenting on figures from the Central Bank indicating that lending by the financial institutions for home-buying in September slumped to its lowest growth rate in five years in the wake of the terrorist attacks on the United States.
The number of mortgages went up by just 1.5%, down from 2.2% in the same month last year.
Mr O’Hogan said September was ‘‘probably the worst month that we can remember’’, although things had picked up in October.
The Government ordered so-called social housing schemes in a bid to curb a steep spiral in property prices sparked by Ireland’s now-declining Celtic Tiger economic boom.
Builders were directed to devote as much as 20% of housing developments to homes which first-time buyers could have an opportunity of buying.
The Government has reported ‘‘a significant increase’’ in the number of new affordable units reaching the market.
But Mr O’Hogan said there had been ‘‘a fundamental change in purchasers’ confidence’’, and that the volume of sales was declining.
‘‘There is pressure on prices, but that does not seem to be the key issue - rather confidence in ability to take out mortgages and job security are the big issues at the moment,’’ he said.
‘‘Particularly the issue of social housing has very much come to the forefront.
‘‘It’s a key issue with potential purchasers - their awareness that if there is to be social housing on a site, where it will be.
‘‘There is a general concern over the uncertainty that relates to social housing where it will be, who will be living in it, what the consequences for those areas will be.
‘‘It certainly is not snobbery, it is a natural concern.
‘‘This is a major investment for most people, probably the largest investment they will ever make. So understandably, many of them want to wait and see how this turns out.’’
One of Ireland’s biggest building materials companies, CRH, today said tough trading conditions were expected for the first half of next year because of a fall in demand in its ‘‘main markets.’’
The group, a major player in the United States building sector, reported ‘‘major disruption’’ because of the September 11 terror strikes on New York and Washington.
