Written Answers - Social and Affordable Housing

Thursday, 23 February 2012

Dáil Éireann Debate
Vol. 756 No. 4

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  168.  Deputy Denis Naughten  Information on Denis Naughten  Zoom on Denis Naughten   asked the Minister for the Environment, Community and Local Government  Information on Philip Hogan  Zoom on Philip Hogan   if he will review the criteria covering the issuing of local authority mortgages and shared ownership schemes; and if he will make a statement on the matter. [10442/12]

  170.  Deputy Denis Naughten  Information on Denis Naughten  Zoom on Denis Naughten   asked the Minister for the Environment, Community and Local Government  Information on Philip Hogan  Zoom on Philip Hogan   if he will review the criteria covering the issuing of local authority mortgages in view of the fact that they are now as inaccessible as a bank or building society mortgage; and if he will make a statement on the matter. [10444/12]

  171.  Deputy Michael McCarthy  Information on Michael McCarthy  Zoom on Michael McCarthy   asked the Minister for the Environment, Community and Local Government  Information on Philip Hogan  Zoom on Philip Hogan   if there is any State supported scheme which enables a person to purchase [985]a home that they are renting; the criteria to qualify for any such programme; and if he will make a statement on the matter. [10446/12]

Minister of State at the Department of the Environment, Community and Local Government (Deputy Jan O’Sullivan): Information on Jan O'Sullivan  Zoom on Jan O'Sullivan  I propose to take Questions Nos. 168, 170 and 171 together.

In advancing loans for house purchase by lower income borrowers it is of critical importance that local authorities make such funding available on the basis of sound lending criteria. My Department and individual local authorities have a responsibility to ensure that the borrower can sustain the loan over the full term. Of equal importance, in view of recent developments in the domestic property market, is the imperative for a local authority to ensure that prudence and pragmatism are applied to all aspects of the management of its housing loans book. In a time of limited resources, deploying those resources in a focused and effective manner ensures the management of its loans portfolio can be achieved as efficiently as possible.

The current credit policy has been in effect since 2009. It was deemed appropriate at that time to update the elements associated with local authority lending and to have a homogenous regime in place that ensured best practice was followed across the sector. All applicants are now assessed according to the same criteria, and their applications subjected to the same independent scrutiny. It is desirable to make adequate lending provision available to local authority tenants who wish to avail of the tenant purchase schemes, while also adhering to prudent lending practices, and the current guidelines achieve equitable consideration of all applications.

While it is the case that the rate of refusal of applications has increased it is also clear that the loans issued since the introduction of the revised credit policy are more likely to be fully performing. I am happy that the current mortgage loan model is fair and adequately meets the needs of prospective borrowers and facilitates participation in housing acquisition initiatives such as the tenant purchase schemes.

These schemes include the 1995 tenant purchase scheme for existing local authority houses which offers discounts up to 30% plus €3,809 off the market value, depending on length of tenancy; the incremental purchase scheme for certain new local authority houses, and the recently-introduced scheme for the tenant purchase of apartments in designated local authority complexes offer discounts of 40% to 60% off the all-in cost or market value respectively, depending on income. It is the intention to replace the 1995 tenant purchase scheme with a new scheme based on the incremental purchase model when the necessary amending legislation is in place.


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