Measures in the housing market to yield results

The proportion of first-time homebuyers of the total number of apartment buyers has been steadily increasing in recent months and years, as reported in the latest monthly report from the Housing Financing Fund. This is very positive news and shows that it has now become easier than before for a larger group to save for a down payment on an apartment. This is particularly gratifying in light of the fact that one of the key points in the government’s statement on supporting the cost of living agreements from spring was to make it easier for young people and those with low incomes to enter the housing market.

Better can be done if it is to suffice

This is certainly a cause for celebration, but better can be done if it is to suffice. In a report that the task force I appointed to discuss measures to lower the threshold for young people and those with low incomes in the housing market produced in spring, it was noted that the threshold for young people and those with low incomes in the housing market is still too high. Despite increased purchasing power and historically low real interest rates. The Ministry of Social Affairs is therefore working, in collaboration with the Housing Financing Fund and labor market stakeholders, to develop further measures to support first-time buyers and those with low incomes.

The lowest income groups must not be forgotten

Housing is a basic need for all and it is irresponsible if we leave large groups behind in the housing market. The rental market nearly doubled following the economic collapse in autumn 2008 and according to a survey by the Housing Financing Fund, 92% of tenants find it unfavorable to rent and only 8% believe they can leave the rental market within six months. Additionally, there are many who lost their homes in the economic collapse and have not been able to re-enter the housing market. In many cases, those people simply cannot bridge the gap needed to provide 20-30% of their own equity when purchasing an apartment. These groups must not be forgotten.

The Ministry of Social Affairs is working on various additional measures to promote greater balance and stability in the housing market. A pilot project by the Housing Financing Fund was recently introduced in the government's consultation portal to address the challenges faced by municipalities in rural areas. I have high hopes that this can help break the stagnation in job creation in the countryside, where the lack of suitable housing often hinders the development of the local economy.

At the next session of Parliament, I intend to propose extensive amendments to the laws concerning housing issues. This includes amendments to the laws on general housing that have already been announced, which involve changes to income and asset limits so that more people can afford to rent and live in general rental apartments. Likewise, proposed changes to the rent laws will further ensure the rights of tenants.

With the proposed merger of the National Planning Agency and that part of the Housing Financing Fund that deals with the implementation of government housing support, a new powerful housing authority will be created. The agency will have the role of enforcing government policy to ensure that the public always has access to adequate and safe housing at an affordable price in accordance with individual needs, regardless of financial situation and residency. This demand was also clearly expressed in the cost of living agreements. The aforementioned measures are steps in this direction.

Ásmundur Einar Daðason, Minister of Social Affairs and Children. The article was published in Fréttablaðið on 15 August 2019