Home Building Finance Ireland (HBFI), which was set up by the Government to fund new homes, grew its total loan approvals by 15 per cent in the first half of the year when compared with the previous six months.
The State-backed lender for builders opened for business in January 2019 with an initial war chest of €750 million from the Ireland Strategic Investment Fund to fund the delivery of up to 7,500 new homes over five years. It can also raise additional funds on the market.
The latest figures from the group show loan approvals totalled €1.4 billion in the six months to June 30th, up 15 per cent on the €1.25 billion in the six months to the end of 2022, and also up on the €1.16 billion in approvals in the first half of 2022.
At the end of June, HBFI had approved funding for 6,357 new homes in 117 developments in 22 counties. Social or affordable housing accounts for 30 per cent of the new homes approved for funding.
In the same period last year, it approved funding for 5,210 new homes in 86 developments in 20 counties. Social housing projects accounted for 23 per cent of the new homes during that period.
Some 1,978 HBFI-funded units have already been sold, with a further 1,688 contracted for sale or sale agreed as at the end of June 2023.
Of the €1.4 billion approved, drawdowns have taken place in respect of facilities totalling €979 million for 66 developments supporting 4,258 homes where construction is in progress or has completed.
HBFI said it typically expects a time lag of between three and six months between a loan being approved and its first drawdown.
Individual loan facilities range from €1 million to €108 million, with an average size of €12 million. Terms of these facilities range from six months to 48 months, with an average of 22 months.
HBFI also announced that it will introduce a new lending product next month to address an “emerging gap” in the funding market.
The product will be available to larger homebuilding firms that may encounter issues accessing funding in order to accelerate their delivery. It said further details of the product will be announced closer to launch.
HBFI chief executive Dara Deering said the group was making “strong progress” in supporting increased housing supply for owner-occupiers, renters and people who need social or affordable housing.
She added that the group is operating against a “challenging backdrop” of higher interest rates and inflation in construction materials and labour.
