A RADICAL plan to help modest-income earners to purchase homes at low interest rates is expected to be presented to the Cabinet for approval today.
The Minister of State with responsibility for housing, Mr Bobby Molloy, yesterday received Government backing to proceed with plans involving a "special loans initiative" for people earning less than £20,000 a year who want to buy their own homes.
Government sources last night described the initiative as "an affordable housing scheme" under which local authorities would play "a primary role" in the administration of low-interest State loans to people who were failing, in the face of escalating property prices, to get a foothold in the housing market.
It is understood that details of the initiative will be published today, after Ministers approve the package at their weekly Cabinet meeting.
The issue was discussed in general terms during a daylong Cabinet meeting yesterday, but the details are due to be rubber-stamped today.
Mr Molloy and his officials have been meeting regularly to discuss policy on the housing situation, which has become one of the most acute issues facing the Government. Sources said the loans initiative was one of several proposals to be announced soon aimed at easing the problem.
Special loans would be offered at low interest rates. But it was not clear precisely how much money would be set aside to fund the proposal.
"If you go in with the aim of providing thousands of houses on this basis, you could totally distort the market. So this must be done with great care," one senior source warned.
"The initiative is aimed at all those people who 10 years ago would have had the income that would enable them to take out a loan to buy a house but who cannot contemplate that now," he added.
It is understood that the latest initiative is not connected with a joint ownership mortgage scheme proposed last month by the Bank of Ireland to help middle-income earners to buy a house.
While the housing shortage is concentrated in Dublin, where prices have rocketed, the rising cost of property throughout the State is leading to a more widespread emergency in the market.
Mr Molloy declined to comment on his plans last night and a spokesman said that he was "looking at an option to help lower-income families purchase their first home."
Meanwhile, a Government spokesman confirmed that "Bacon Two", the second report dealing with housing policy, was likely to be published before the end of March.
The Cabinet also discussed yesterday a memorandum from the Minister for Public Enterprise, Ms O'Rourke, on the provision of an adequate rail network in conjunction with housing developments.
It is envisaged that future housing projects should be adjacent to improved railway lines, to facilitate commuting.
The provision of a fast rail corridor system would allow housing expansion outside Dublin, easing both traffic and housing congestion in the capital. No costings have yet been carried out for such a project, involving an overhaul of the suburban rail network.
However, Ministers agreed on the need for strategic planning, not just on land rezoning but on the procurement of zoned land near railway stations.