Bill on housing guarantee scheme for youth passed

Ljubljana – The National Assembly unanimously passed on Wednesday a coalition-sponsored bill on a housing state guarantee scheme for young. Although deputy groups agreed the youth must be helped out, the centre-left opposition believes the bill is vague and was filed to parliament as part of the election campaign.

The new legislation should make it easier for those under the age of 38 and for young families to get a housing loan.

The state will issue a guarantee for a loan of up to EUR 200,000 with a maturity of up to 30 years if a borrower addresses their housing problem for the first time.

The borrower will also have to secure the loan with a mortgage and participate with at least 20% of the principal.

Finance Ministry State Secretary Maja Hostnik Kališek said the government was in favour of addressing housing issues of the young generation.

However, she cautioned against awarding a state guarantee to persons who are not creditworthy, citing a Slovenian central bank decision on macro-prudential restrictions on lending. “The question is whether banks will really give a loan to a person who is not creditworthy under this decision.”

Still, she believes the law could serve as a means to encourage the central bank to relax its rules because the state will guarantee that loans are repaid.

The bill was filed by MPs from the coalition Democrats (SDS), New Slovenia (NSi) and Concretely, the opposition National Party (SNS), minority MPs and an unaffiliated MP.

SDS MP Tomaž Lisec said “this is an important bill when we all talk a lot about addressing housing issues of the young but unfortunately do very little about it”.

Andrej Černigoj from the NSi added that it was a step forward: “The young will get a housing loan much more easily.”

The centre-left opposition disagreed, with Nik Prebil from the Marjan Šarec List (LMŠ) saying “it’s no coincidence the story falls into the pre-election period while it will eventually bring no desired benefits”.

The Left said the bill is flawed as it does nothing to change the situation in the housing market. MP Primož Siter said that more funds are needed to build new public non-profit homes, that regulation of the rental market should be enhanced, and rents and empty homes taxed.

The bill was also criticised by the Institute for Housing and Spatial Studies, which argued that it will not make housing more accessible to the youth.

As there is a lack of housing on the Slovenian market, it will only encourage further growth in prices, the institute said in a statement, referring to a 2020 report of the European Parliament which cited such policies of subsidising housing as an example of flawed housing policy.