Press release
Minister McGrath publishes review of Home Building Finance Ireland and extends agency timeline to continue delivery of housing
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The Minister for Finance Michael McGrath today (Wednesday) published the second review of Home Building Finance Ireland (HBFI). HBFI was established as part of the government’s response to Ireland’s housing supply shortage and was formally launched in January 2019 with an initial loan fund capable of providing funding to assist in the delivery of up to 7,500 new homes over five years. Section 24 of the HBFI Act provides for a periodic review of HBFI to ensure that it is fulfilling its functions as set out in the Act and that its continuation remains necessary given prevailing market conditions.
This also aligns with a commitment under Housing for All to assess the ongoing impact of HBFI on the level of capital available for residential development, and consider whether there is evidence to support an amendment or extension to HBFI product offerings.
The review has concluded that HBFI should continue in operation at this time while continuing to closely monitor developments across the wider market, to respond where possible to ensure that the supply of new homes does not get disrupted due to a lack of funding. This review is now available on the Department of Finance website: Home Building Finance Ireland ('HBFI') Section 24 Review - May 2023.
Minister McGrath announced the continuing operation of HBFI while on visit to a new housing development in Ashtown, Dublin which was funded under the HBFI Momentum Fund. Funding was provided by HBFI to develop 92 units with a mix of 3 and 4 bedroom units, aimed predominately at the first-time buyer market.
Speaking today, Minister McGrath said:
“I am delighted to be here in Ashtown this morning to see first-hand the delivery of over 90 new homes. HBFI began lending during 2019, and has steadily established itself as a key contributor to the residential development finance market in Ireland. It is clear, when on a site like this, that HBFI has had a material impact on the availability of senior debt finance across the country which has led to the delivery of new homes which would otherwise not have been built. By the end of April 2023, HBFI has approved total funding of €1.353 billion to support the potential delivery of up to 6,161 homes across 22 counties in Ireland. HBFI has advanced funding for 60 developments by end 2022 with the number of homes completed through HBFI funding expected to increase significantly over the coming years.
"Through this current review, we have engaged extensively with a broad range of stakeholders who have provided feedback in relation to the funding landscape more generally and on the impact HBFI is having on the market for residential development finance. A clear consensus has emerged that HBFI is playing a key role in providing access to debt financing for residential development which would otherwise not be available on the market. In addition, feedback from all stakeholders is that HBFI should continue its role in the market for residential development finance into the future.
"Following this review, I am satisfied that funding gaps remain and that existing funding providers may not yet have the capacity or risk appetite to provide the overall levels of funding required to fully support the growth in housing output required to meet expected demand at this time. Therefore, this review concludes that HBFI should continue in operation at this time with a further review to take place in 2025.
"I would like to thank all those who responded to the public consultation and who engaged with my department during the course of this review. I would also like to thank the HBFI Board and staff for their input into the review and for their continued day-to-day efforts.”
Dara Deering, the Chief Executive of HBFI, said:
“This review shows that HBFI is playing a significant role in accelerating the delivery of new homes across Ireland by addressing funding gaps that are faced by housebuilders.
"HBFI has established a strong track record in funding new houses and apartments for first-time buyers, renters and people who need social housing, and we look forward to building on that track record in the coming years.”
The first Section 24 review was published in May 2021 and determined that, during its first two years of operation, HBFI had met its obligations under the HBFI Act and was having a positive impact on the availability of finance in the residential development funding market and should continue in operation.
| Total funding approved | €1.353 billion |
| Number of homes supported | 6,161 |
| Number of loan facilities approved | 111 |
| Average loan size | €12.2 million |
| Average number of homes per scheme | 56 |