"People aren't building because they can't get finance" - pillar banks urged to lend to small developers
Mayo councillors have appealed to Bank of Ireland and AIB to resume lending to small developers, warning that a lack of finance is holding back housing delivery in the county, with planning applications rising despite the issue.
Elected members of Mayo County Council have said a lack of finance is the biggest obstacle to house building in the county, even as planning applications rise.
Two of the councillors have appealed to the country's main banks to resume lending to small developers, warning that a lack of finance is holding back housing delivery in the county.
Cllr Cyril Burke and Cllr Michael Burke made their comments at a Mayo County Council meeting where members discussed a second variation to the County Development Plan.
Banks "still not coming up with finance"
Cllr Cyril Burke praised council planners for their work on the variations but said the biggest remaining stumbling block for people delivering houses is access to funding.
"The pillar banks, Bank of Ireland and AIB, are still not coming up with finance for small developers to build housing schemes, and it's a huge problem," he said.
He said local authorities and the government had delivered most of the country's recent housing stock through social housing, and that the private market was only now starting to take off. Developers, however, need third-party finance to build schemes, he said. "I'm appealing to them to come forward and do that."
Cllr Burke also said Mayo was among the first counties in the country to deliver the first variation, and that the results were now visible. "There's a lot more applications coming in for housing," he said, adding that many had been granted.
Large schemes
Cllr Michael Burke agreed, saying the banks appear to have withdrawn from the market and are interested only in large schemes of "100 plus" homes.
He said lending was once available for smaller projects, with developers drawing down funds in stages as they built and sold. In his view the banks were well secured. "Property isn't going anywhere negative at the moment," he said, noting that prices had continued to rise from 2016 through to the present despite global turmoil.
He said demand remains strong. He cited a house that came on the market at €420,000 in Dublin and has since risen to €495,000 amid competition from buyers. Westport is more expensive, he said, but "in Castlebar, Claremorris, Ballina, my own town, Ballinrobe, there's a great market for houses."
"People aren't building because they can't get finance to start the ball rolling," he said, adding that if a house is built and put on the market, buyers will sign up for it.
Funded by the Local Democracy Reporting Scheme