asked the Minister for Local Government whether he is aware that the operation of the Housing Authorities (Loan Charges Contributions and Management) Regulations, 1967 is proving to be a great disadvantage and hardship to prospective purchasers of local authority houses; whether he has received any representations regarding this matter; if so, if he will state their nature; and if he will have these regulations amended forthwith to afford tenants a more equitable opportunity of purchasing their homes.
Ceisteanna—Questions. Oral Answers. - Local Authority House Purchasers.
71.
I have received some representations regarding the prices of houses stipulated by approved purchase schemes since the Housing Authorities (Loan Charges Contributions and Management) Regulations, 1967, came into operation.
A local authority which decides to make a scheme for the sale of their houses are under a statutory obligation to base the sale prices on the market or replacement value of the houses. The cost to the tenant is, however, reduced by a discount of 3 per cent for each year after five during which he has continuously been a tenant of any local authority house, up to a maximum of 45 per cent for houses which are not in a built-up area. The discount is 2 per cent and 30 per cent respectively in a built-up area.
The usual practice is for local authorities to obtain expert professional advice as to the market or replacement value of the houses included in the purchase schemes and to offer them to tenants at these prices, subject to the appropriate discounts. The experience has been that sale prices generally have been very favourable to tenants, many of whom have made substantial profits by selling their houses shortly after purchasing them. This applies even where the tenant is not entitled to discount.
No tenant is obliged to buy his house from the local authority. He can, if he wishes, continue to enjoy the benefit of the substantial subsidies paid by the State and from the rates to keep rents down. However, well over 10,000 tenants have already purchased their houses or are in the process of doing so on terms approved under the 1967 regulations. This is a clear indication of the degree to which these terms have already been accepted.
I consider that the existing purchase terms are equitable as between the local authorities and their tenants. I do not accept that tenants who wish to purchase are being asked to pay an unfair price for their houses and I do not propose to amend the regulations as suggested.
The first priority of a housing authority is not to provide houses for those who can afford to buy them; it is to provide houses for letting to people without decent accommodation who cannot afford to buy. By selling houses local authorities lessen their ability to do this since the more houses they sell the less they will have available for letting to persons in need. I have, however, in the interests of the tenants with a genuine desire to purchase, encouraged sale schemes on the basis of market or replacement value less the appropriate discounts.
Would the Minister not agree that this scheme, which was introduced by one of his predecessors, Deputy Blaney, is a penal scheme which is having a very bad effect on tenants who like to own their own house? Since it has been agreed that farmers are entitled to security of tenure and to purchase their farms, would the Minister not agree that there is no reason why a tenant of a local authority house should be asked, in 1972, to pay £2,500 to £3,000 for a house which cost £70 to build 80 years ago?
I certainly do not agree that the terms proposed for the purchase of houses are penal. Where purchase schemes have been drawn up and houses have been offered to tenants, the prices have been very reasonable. This is borne out by the fact that many of the houses have been sold subsequently, at a profit of £1,000. I, as Minister in charge of Exchequer funds that are made available for housing in general, must keep in mind the interests of each section of the community when drawing up regulations of this kind and in carrying out regulations and schemes under Acts that have already been passed by the House. Wherever purchase schemes have been introduced, there has been a bit of reaction. If people feel that by pressure or agitation they will reduce the price of the house, then they will certainly continue the agitation. It is very wrong for public representatives to encourage the idea that there is a possibility of these prices being reduced during the period when a scheme is available to the tenants. I have no power in law to reduce the purchase price while the scheme is in operation. It is very wrong to give the impression that a bit of agitation and a bit of a row can knock a few pounds off the price of the house and save the tenant money. This is just not on. Very wrong advice has been given to tenants in relation to this matter by some Deputies of whom I would have thought more; I thought that they would not lower themselves by these tactics, giving the tenants a completely wrong impression.
Would the Minister not agree that he is, in fact, penalising a large section of tenants who want to be owners of their own houses because there are a few people who sold houses at a big profit? While I agree that there will not be a change as long as the present Government are in office, there might be a change quite soon.
The Deputy hopes. Hope is a great thing.