Tuesday, 7 February 1989
Dáil Éireann Debate
Mr. Desmond: asked the Minister for the Environment in respect of each local housing authority, the number of persons who applied under the 1988 tenant purchase scheme to buy out their homes from the local authority; and if he will make a statement on the matter.
Mr. Bell: asked the Minister for the Environment if he has any plans in his Department to extend the period of application for the 1988 tenant purchase scheme; if he has any plans to introduce another scheme in 1989; and if he will make a statement on the matter.
Proinsias De Rossa: asked the Minister for the Environment if, in view of the fact that the scheme for the sale of flats and maisonettes to local authority tenants was only notified to tenants in December 1988, he will extend the closing date for applications under the scheme from 31 December 1988 to 31 December 1989.
The number of applications received by each local authority is set out in the tabular statement which I propose to incorporate in the Official Report. There  were 40,655 applications by tenants to buy their houses: this represents some 45 per cent of eligible tenants. In addition, 1,752 tenants applied to purchase flats and maisonettes. I am very pleased at the exceptional response to the scheme which compares with an average of some 5,000 applications in recent years. As I made clear since I introduced the scheme, applications had to be received by 31 December 1988 and I do not intend to extend that date. I am at present considering purchase arrangements, including those for flats, for this year.
|Local Authority||No. of Applications|
|Houses||Flats and Maisonettes|
|Cork — North||534||—|
Mr. Bell: Would the Minister agree that while the national average for applications is 45 per cent, it is as low as 33 per cent in some areas due to the backlog of repairs needed to local authority houses? In some cases these are major structural repairs and local authority tenants have been reluctant to enter into arrangements for the purchase of such houses. Has the Minister any plans to introduce some form of appeal mechanism on the lines of that contained in the 1976 local authority tenant purchase scheme introduced by the then Minister, Mr. Jimmy Tully?
Mr. Flynn: There was a very good response to this scheme, amounting to 40,655 out of a total of 91,000 tenants. Applications ranged from 100 per cent in one local authority area to 24 per cent in another. There was a wide variation. I recognise that some people may have been reluctant to purchase if they felt that their homes were not up to standard. It was intended that the local authority would estimate the market value of a particular house in its present condition. That allowed for the variations in prices being sought by the various authorities. If a person applied to buy a house on which repairs needed to be done, the price was reduced in lieu. Had it been part of the scheme that the house would have had to be repaired to a certain standard before the purchase scheme could operate, the scheme would have been a nonsense and would not have worked. Many people have applied because of the terms of the scheme as it exists.
Mr. Bell: Would the Minister agree that a sizeable proportion of applicants are in receipt of social welfare benefit and that many such tenants are unsure whether they will be deprived of formal sanction by the local authority under the scheme? Has the Minister any plans to allow people in receipt of social welfare benefits to proceed with purchase? Are there any restrictions in that regard?
Mr. Flynn: There are no restrictions. I called together the housing officers from  all the local authorities to set down precisely what was intended. The fact that a person is in receipt of any kind of social welfare assistance does not deprive him or her of the opportunity to own a home. I would welcome them. That is the reason there is such a big response.
Mr. Quinn: I want to ask two questions. Is there to be a 1989 tenant purchase scheme? Arising out of the response of various tenants to the 1988 scheme and the method of market valuation, is the Minister aware that anomalies have arisen whereby people who contracted under the 1986 scheme or earlier schemes find themselves buying houses at a rate far in excess of that being paid by their neighbours? Is the Minister aware of those problems and of the discord being caused between neighbours? If so, has he any proposals to reduce the anomalies between this scheme and the older schemes?
Mr. Flynn: The answer to the first part of the Deputy's question is no. Regarding his second question, I am aware that anomalies exist. That was always a feature I did not like about the scheme but it was a once-off scheme and people were left under no illusions as to what it meant. This was a 1988 scheme and those who had agreed to purchase their homes under previous schemes could not transfer to it.
Mr. Quinn: At one level this matter is critical for local authorities but everyone in the House must be concerned about equity. In my constituency people living literally next door to one another will be paying a difference of between £20 and £30 per week to local authorities. In such cases will the Minister consider amending the housing scheme or recommending to the local authorities that at the end of the mortgage period five years will be taken up to provide some degree of equity? In other words will he agree that while it is necessary to maintain cash flow at current levels for local authorities, equity could  be achieved between new scheme purchasers and old scheme purchasers by means of a reduction in years? Will he give consideration to that?
Mr. Flynn: A whole variety of anomalies have been brought to my attention concerning this matter. People who moved into their homes on 1 February want me to extend the scheme to that date. People have also written to me saying they are deprived of the right to buy their homes because they did not move in until the middle of the year and so on. Unfortunately, the scheme was a once off which terminated on 31 December last and I cannot alter it. I note the Deputy's remarks about some of the difficulties involved but I cannot give any undertaking in relation to them. People should not have an expectation that there will be any variation in regard to this matter because that is not the case.
Mr. Quinn: The tenant purchase scheme was introduced in 1966 or thereabouts. Will the Minister accept that none of the previous tenant purchase schemes caused as much tension in terms of anomalies between previous and existing terms of purchase? Having regard to the fact that the Minister introduced this market value based system and, therefore, must take some responsibility for some of the anomalies, will he give the House an indication that he will seriously look at various means which would have as their objective the equalisation of the purchase cost to different tenants——
Mr. Flynn: This has been the most successful scheme since the first tenant purchase scheme was introduced years ago. The indication is that many people want to avail of it, indeed it involved 45 per cent of the total stock. It is well to remember that there is a huge imbalance between the question of management and maintenance costs. In the last year for which we have figures — 1986 — the total cost was £71 million but the total  rental income that year was just £39 million, a deficit of £32 million. This scheme was designed to help local authorities in relation to their cash flow. I am aware of the anomalies but I cannot do anything in so far as that scheme is concerned. However, the Deputy made a good point and I am listening.
Mr. McCartan: Will the Minister expand a little on his statement that he is currently considering a scheme regarding flats? Am I correct in thinking that it relates to the conditions under which existing applications should be dealt with? The whole concept of the sale of flats was raised very late in 1988 and, in view of this, has the Minister any intention of extending the time to enable flat dwellers to purchase? Will he agree that some facility should be extended in that regard in view of the fact that the conditions under which the sale might take place are still being considered by his Department?
Mr. Flynn: I had representations concerning that matter and I accept that the scheme was introduced too late in the year. A working party comprised of officials of the Department and local authorities was set up and when I have their report at the end of March I will see what I can do. At present I am favourably considering having a special scheme that might cater for that situation.
Mr. Flynn: Yes. It is reasonable to say that I am favourably disposed to the scheme but I should like to get the report of the working party before I finally decide. Perhaps the Deputy will pursue the matter at the end of March.
Mr. Sherlock: In view of the fact that managers of local authorities are at present in the process of asking people on social welfare or low incomes to discuss their repayments — in some instances people have not got decisions — is the Minister saying that, irrespective of a person's capacity to pay, their application to purchase should be agreed by the local authorities?
Mr. Flynn: As long as the local authority concerned received the application before the end of December, then it is proper, valid and live and it is a matter then between the local authority and the applicant to work out what is best in the interests of both of them. There is nothing barring someone on social welfare from participating in this scheme. Indeed I am encouraging it and I made that quite clear to the local authorities involved. I should like everyone to have the opportunity of owning their own homes.
Mr. Flynn: Obviously if the local authority are satisfied that people cannot make their repayments it is hardly in the interests of the individual to pursue an application. However, circumstances can change and, if an application has been received, it does not have to be dealt with before 1 May. It will take quite some time to deal with the 40,000 applications received.
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