’Great concerns’ over affordability of Kerry’s new affordable housing scheme

By Alastair Tibbs, The Kerryman

A Kerry councillor has expressed “great concerns” over the affordability of Kerry’s affordable housing scheme as the details become clearer

At the December Kerry County Council (KCC) meeting, Councillor Deirdre Ferris highlighted the contribution paid by the local authority as part of the initiative, saying it wouldn’t be enough to make housing affordable.

Affordable housing is proposed to be developed in Tralee and Killarney, with units potentially on the market by March 2026.

The government’s affordable housing scheme allows local authorities to put newly built homes on the market at a reduced price for eligible prospective homeowners.

In return, the local authorities own an equity share equivalent to the reduction in price which is ultimately bought by the homeowner.

“I have great concerns about the affordability of these houses,” said Cllr Ferris, claiming the maximum contribution from the local authority would be €75,000.

She cited the example of three-bed houses in a Tralee development that had gone on the market for €430,000. Thus, even with the maximum contribution from KCC, an affordable housing applicant would effectively have to qualify for a mortgage of €355,000.

“The reason why on the affordable housing scheme is because they cannot afford that,” argued Cllr Ferris.

Limerick City and County Council’s affordable housing demonstrates how the numbers could work in Kerry’s scheme, with the contribution on the part of the council varying with applicant’s income.

For a €300,000 house in Limerick, a successful applicant on an income of €64,125 would receive a council contribution of €15,000, equivalent to a five per cent equity share. However, with an income of €57,000, the council would contribute a significantly larger amount of €46,667, equating to 15.56 per cent.

The applicant is then responsible for taking out a mortgage to finance the rest of the purchase.

KCC estimated last month that 10 to 20 units of affordable housing were ready for sale in March, based on the results of other local authorities.

The council is also looking at reducing the minimum population size required for a settlement to qualify for affordable housing, which currently stands at 10,000 people. This currently constrains the scheme in Kerry to Tralee and Killarney, leaving smaller settlements out of the equation.

The council said it is “optimistic” that it could amend these requirements and look at utilising the scheme in less populated areas of the county.