Housing organisation Respond has warned that the rise in construction cost inflation and interest rates is making the delivery of social and cost rental homes "increasingly challenging".

The approved housing body has called for ongoing reviews of the current funding models for the schemes, in order to improve their viability and ensure flexibility.

Respond spokesperson Niamh Randall said, "we have seen huge pressure in terms of the cost of inflation and also the interest rate hikes as well".

Speaking at the launch of the organisation's annual report for 2021, she said "it's really important to look at the viability of these schemes and to keep them under current review".

Ms Randall said Respond is working with the Department of Housing on "a welcome review" of the structure and operation of the Capital Advanced Leasing Facility funding scheme, which enables Approved Housing Bodies to deliver social homes".

"In addition, we welcome commitments to make changes to the Cost Rental Equity Loan Scheme as part of Budget 2023," she added.

"I think it's really important to ensure that they're kept under review because there's going to be a difficult winter coming down the line and we know that there's a huge amount of pressure for people."

The Minister for Housing said some changes have been made in recent weeks with "a couple of new cost rental schemes".

Darragh O'Brien said "there's some pressure on the funding side because of rate increases but we've changed the Cost Rental Equity Loan model and we're also allowing more upfront costs".

Speaking at the event, he said he believes the changes that have been made "will deal with some of the difficulties, actually if not all of them, that have been raised".

Minister O’Brien also insisted the schemes are constantly being kept under review.

The Respond annual report shows the association provided 16.4% of all AHBs social and affordable homes in 2021.

The organisation delivered 624 new units and commenced 778 homes last year, compared to the delivery of 572 units and 907 commencements in 2020.

It means Respond now owns or manages over 6,500 properties across the country, with almost 15,000 tenants.

It also has 1,422 new social and cost rental homes under construction across the country, while its current building programme has a value of more than €1 billion.