asked the Minister for Local Government if he is aware that the charging of interest on the purchase price of local authority houses in the urban area of Athlone, County Westmeath, when such price is paid by instalments, is a serious financial burden on purchasers and a deterrent to would-be purchasers; and if he will abolish the interest charge or reduce it to a nominal rate from the present 10 per cent.
Ceisteanna—Questions. Oral Answers. - Housing Interest Charges.
31.
I am not so aware. Tenants who avail of the purchase scheme have the option of paying the purchase price in a lump sum or in the form of an annuity over a period of years with or without an initial deposit. When the tenant opts for the latter course, interest is charged on the repayments at the same rate as that charged to borrowers under local authority house purchase loan schemes. I am not satisfied that there would be any justification for having a lower interest rate for tenant purchasers than for persons purchasing their houses with the aid of local authority loans.
Is the Minister aware that those are very old houses and that the rent paid by the occupants has long ago cleared the cost of erection? Is he further aware that up to two years ago until the last scheme was introduced those houses could be bought for £80? Now, they are costing £600 and if the applicants avail of the loan they must pay interest on it and it costs them £2,500. Surely this puts an unbearable financial strain on those people? Can the Minister do nothing to alleviate this?
The purchasers of local authority houses may purchase by way of lump sum or they can avail of the annuity form of payment. Where they take the latter course interest is charged at a rate similar to that for the local loan.
Surely it is unfair that a house that could be bought under the Minister's predecessor for £80, under the scheme available a few years ago, should now cost £600 if he is able to pay the money down and, if he is not and avails of the loan scheme, should cost £2,500? Surely that is an unfair burden to place on people whom we are trying to encourage to purchase their own houses?
The question relates to the interest charged.
Surely the interest has nothing to do with the fact that the house a few years ago could be bought for £80? Now the house is five years older and the would-be purchaser is asked to pay many times the price.
The question deals with interest charges.
The interest charge would not be a consideration if the cost of the house had not increased. Nobody would mind the interest charged on £80 but one certainly does mind when the figure is £600. Those are poor people, many of whom have young families and are trying to purchase those houses.
Does the Minister not agree that a grave injustice is being perpetrated in this case where houses that are 40 years old or more are now being priced at current values?
The question relates to interest charges. It does not relate to the price of local authority houses.
The interest would not be there if the cost had not gone up.
The Deputy is referring to interest charges and these only arise out of the method of payment which the intending purchaser decides to adopt.
Question No. 32.
The interest comes in because the house is now costing £600 instead of £80. They did not object to the house costing £80 which was realistic.
The houses are on offer at a very reasonable price.
The Government are away up in the moon. It is easy for the Minister to talk with his £6,000 a year.