Construction BUSINESS

Bank says money will finance 3,000 new units

AIB is launching a new €500 million fund to back the development of up to 3,000 social houses. It is a follow-on from a previous €300 million fund, which has been deployed a year ahead of schedule and has financed the construction of 2,000 units.

The new fund will provide development finance to Approved Housing Bodies (AHBs) or private developers involved in the provision of social housing. The bank says it has applications already in the pipeline for projects that would provide 500 social housing units. Overall, it says it is the “primary lender” backing the construction of 10,000 units.

“Addressing the housing supply deficit is one of the country’s most urgent social and economic imperatives,” said Colin Hint, the bank’s chief executive.

Growing stock

AIB says it is a “significant lender” to AHBs, which are non-profits, sometimes known as voluntary housing associations, that supply social housing. They build or acquire the houses and typically an AHB then manages the rental.

An approved register is maintained by the State of such housing non-profits, which collectively manage a stock of about 43,000 units, growing at about 10 per cent annually.

AIB says it is also a “primary funder” for the State’s mortgage-to-rent system, which helps homeowners who are in arrears to restructure and stay in their properties. The indebted homeowner switches from owning the home to renting it as a social housing tenant.

Source: The Irish Times