Families priced out of Cork homes despite being approved for local authority loans

By Peter McCarthy, Corkman

The maximum amount available under the Local Authority Home Loan scheme is too low in places like County Cork, leaving people approved for a loan priced out of the market, a meeting of Cork County Council heard this week.

On foot of a motion by Cllr Marie O’Sullivan, the council will now write to the housing minister asking that the loan limit be raised from €330,000 to €450,000. Cllr O’Sullivan said the current maximum purchase price allowed under the scheme in County Cork “is no longer reflective of the reality of the housing market we are operating in.”

“At present the ceiling is set at €330,000 but we all know that in many parts of Cork County, particularly in areas with strong demand and limited supply, it is increasingly difficult to find a suitable family home within that limit,” she said.

The West Cork councillor said the limit is affecting people who have been through a divorce and are now seeking to buy a new home. “In many cases their only realistic route to finance is through the local authority home loan, particularly as access to commercial lending is limited. However, because of the current purchase price ceiling, these applicants are now being effectively excluded from the market. They are approved, ready to buy, but they cannot find a suitable property within €330,000 in Cork County.”

“These are people trying to re-establish stability, often while continuing to support children, and remain close to schools, work and family networks. The housing system must be able to respond to the realities of modern life and this ceiling is increasingly acting as a barrier rather than a support,” she said.

Cllr Ann Marie Ahern supported the motion, saying that “when we're dealing with people's principal private residence, and given the current market and the market fluctuations, it is unattainable given the price structure at the moment for anybody to proceed, be it first-time buyers or separation cases. I think that the price ceiling should be increased to reflect the property market and the fact that it is people's principal residence that we are dealing with.”

A Local Authority Home Loan is a government-backed mortgage for first time buyers and fresh start applicant that is available through local authorities. It can be used to purchase a new or second-hand property or for self-build and provides up to 90pc of the market value of the property. Cllr O’Sullivan pointed out that in contrast to the local authority scheme’s limit, the current ceiling under the government’s First Home Scheme is €450,000.

“I believe it is reasonable and necessary that the Local Authority Home Loan ceiling in Cork County is aligned with that figure. This is about ensuring that the local authority loan remains a meaningful and stable pathway to home ownership for working individuals and families who are currently locked out of the private mortgage market,” she said.