Government must rethink shared equity scheme
Responding to the Central Bank’s comments on the Shared Equity Scheme, Labour housing spokesperson Rebecca Moynihan said the decision to pursue this scheme shows a lack of understanding of basic economics. Rather than addressing the affordability crisis at the heart of the housing crisis, this scheme will continue to inflate house prices.
Senator Moynihan said:
“It’s no surprise to see the Central Bank’s comments about the Shared Equity Scheme. Government are opting instead for a profit model and a shared equity scheme that expert commentators, such as the ESRI and Central Bank, have said is a demand side measure. This will increase house prices rather than represent a step change in our approach to housing, making it genuinely affordable for ordinary people.
“Rather than addressing the issue of construction costs and the State leading on building housing, the Shared Equity Scheme will transfer this over to developers. Like with the Help to Buy scheme, many of these new supports for private developments will inflate prices and increase developer profits. We have seen these schemes fail in other markets like in London where it resulted in inflation of almost 6%.
“With house prices continuing to rise and the majority of young people entirely locked out of the aspiration of home ownership, the Shared Equity Scheme will only continue to add to the crisis. The government’s commitment to pursuing this measure flies in the face of basic economics.”