Bank of Ireland is to make an additional €750m available for housing developers by 2026.

It will bring the bank’s total available funding for the sector to €2.5bn.

The vast bulk of the additional funding, some €600m, will be directed towards social and affordable housing units, according to the bank. That will more than double the funding for such projects to €1bn.

The bank said the 40pc extra funding for housing developments will help support the construction of 25,000 units from houses to small and large-scale apartment projects.

Gavin Kelly, the chief executive of Bank of Ireland’s corporate and commercial banking division, said the “greatest challenge” facing Irish society right now is housing.

“The simple fact is we need more,” he said. “Our ambition is to play an even bigger role in meeting this challenge by investing more of our capital to drive more supply.”

About 32,000 homes were built in Ireland last year, with a similar amount likely to be constructed in 2024. But there are still not enough units to ­satisfy demand, and affordability remains a key issue for potential buyers.

“While there’s a serious mismatch between supply and demand, we also need greater diversity in housing to support the evolving needs to our population,” Mr Kelly said.

He said that’s why Bank of Ireland has decided to more than double the amount of finance it is making available for social and affordable housing construction.

He added that the bank is currently funding projects across the country and is looking for more to finance.

“By reinvesting our profit back into the Irish economy, we have more available funds to support more ‘shovel-ready’ projects, big and small, to help deliver our future housing needs,” according to Mr Kelly.

The lack of housing – affordable or otherwise – has the capacity to hamper economic growth.

It stifles labour market growth via immigration and can also deter foreign direct investment.

The American Chamber of Commerce Ireland recently said that nearly 40pc of US multinationals operating here cited housing as the top concern.

There are about 900 US companies in Ireland directly employing almost 200,000 people, the Chamber said.

Reporting On:independent.ie