- Half-year performance update shows funding approved for 5,210 homes in 86 developments in 20 counties – including counties Kilkenny and Limerick for the first time
- HBFI’s busiest ever six-month period
- 715 HBFI-funded units already completed and sold, with a further 1,783 contracted for sale or sale agreed
- 23% of HBFI-funded units are for social housing
Home Building Finance Ireland (HBFI), set up by the Government to fund the delivery of new homes, has grown total loan approvals to €1.16bn at the end of June 2022, an increase of 38% on the €835m at the end of 2021.
The strong performance – HBFI’s busiest ever six-month period, based on approval volumes - means that HBFI has now committed 58% more than the €730m capital initially allocated to it at inception three and a half years ago.
HBFI will continue to have significant lending capacity available for future lending from recycling the proceeds from existing loan repayments. It also has the ability to access additional capital through market-based borrowing if required.
In its H1 2022 performance update published today and available here, HBFI said that at the end of June 2022 it had approved funding for 5,210 new homes in 86 developments in 20 counties. This includes two new counties for the first time – Kilkenny and Limerick. Social housing projects account for 23% of the new homes approved for funding.
715 HBFI-funded units have already been completed and sold, with a further 1,783 contracted for sale or sale agreed.
Of the €1.16bn approved, drawdowns have taken place in respect of facilities totalling €737m, for 50 developments totalling 3,229 units where construction is in progress or has completed. HBFI typically expects a time lag of between 3 and 6 months between a loan being approved and its first drawdown.
Units funded by HBFI range from 1-bed apartments (13%) to 5-bed houses (2%), with the majority consisting of 3 bed (38%) and 2 bed (30%) units aimed at the first-time buyer market.
Individual loan facilities range from €1m to €94m, with an average size of €13m. Terms of these facilities range from 6 months to 48 months, with an average of 22 months.
HBFI Progress Update
Today’s progress update shows that, at end June 2022, HBFI’s key metrics compared to December 2021 were as follows:
HBFI Chief Executive Dara Deering said:
“This was our busiest ever six-month period in terms of loan approvals. This is excellent news for the supply of much-needed new homes and demonstrates a remarkable bounce-back by housebuilding firms that has continued since the early months of the pandemic.
It is also excellent news for the owner-occupiers, renters and people needing social housing who are now living in HBFI-funded homes or will be moving into them in the coming months.
We remain vigilant to risks such as construction price inflation, but we will work closely with the housebuilding firms we lend to in helping them address these challenges and continue adding to the supply of new homes.
We’re also delighted that we’ve expanded our footprint into 2 more counties – Kilkenny and Limerick – bringing the total to 20 the number of counties in which we’ve approved funding.”
The Minister for Finance, Paschal Donohoe TD, said:
“Increasing the supply of housing remains a priority for Government. Through its broad product range, and agile business model, HBFI plays a key role in the Government’s strategy to meet the targets set out under the Government’s Housing for All plan.
Today’s update highlights the strong performance by HBFI over the last six months, with funding approved since inception for 5,210 new homes in 86 developments in 20 counties. I welcome the continued support for social housing, with social housing projects accounting for 23% of the new homes approved for HBFI funding.
I am confident HBFI will continue to monitor the risks and opportunities for future funding. I wish to thank HBFI and its staff for their continued work, particularly over the last six months.”
Measures announced by HBFI to improve housing supply
During 2020 and 2021 HBFI announced a number of initiatives to extend its support for housebuilders:
- The €200m (subsequently extended to €300m) Momentum Fund for large developments in prime locations (now 94% allocated and closed for new applications)
- Extending HBFI’s existing offering to include more large-scale housebuilding firms, by doubling the upper limit for individual HBFI loans from €35m to €75m with an ability to increase further, for qualifying schemes under HBFI’s normal assessment criteria
- Extending HBFI’s existing offering to include smaller housebuilding SMEs, reducing the previous minimum size requirement of 10 units to 5 units
- Agreeing to back major apartment developments for the first time
- A product specifically aimed at social housing with reduced fees, acknowledging the reduced ‘take out’ risk once the units are completed
- A new Green Loan product offering discounted loan rates for qualifying developments that promote sustainable housing delivery
- Established under the Home Building Finance Ireland Act 2018
- Commenced operations on 28th January 2019
- Initial funding capacity of €730 million made available by the Ireland Strategic Investment Fund (ISIF)
- A private company with its own Board operating on a commercial basis, wholly owned by the Minister for Finance
- HBFI is subject to State Aid rules and audited by the Comptroller & Auditor General
Counties in which HBFI is funding new homes
Composition of HBFI-funded homes