Vol. 267 No. 9
asked the Minister for Local Government if he is aware of the fact that it is almost impossible for a person wishing to purchase a dwellinghouse to procure a loan from a building society for this purpose at present; and if there is any action he can take to alleviate this situation.
8.
asked the Minister for Local Government if he is aware of the very long waiting list of applicants for loans from building societies, that many such applicants meanwhile are in danger of forfeiting their deposits on houses and that in many other cases while awaiting the granting of building society loans applicants have had to obtain bridging loans at high interest rates; and if he will extend the housing loans facilities of local authorities.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 7 and 8 together.
I am aware that building societies are not, in general, accepting loan applications at present. I fully appreciate the problems that this situation entails for house purchasers, particularly those who have placed deposits on houses or who have had recourse to bridging finance and, indeed, for the house building industry generally. I have, therefore, had the situation under continuous review. To improve the flow of funds to the societies, the Government introduced on the 22nd May, 1973, a temporary subvention to enable them to offer a higher rate of interest on investment without increasing their mortgage rates. The Government also increased temporarily the existing limit on investment for composite tax purposes from £5,000 to £15,000.
Returns forwarded to me by the principal societies indicate that the subvention has been effective in enabling them to attract additional funds. In the circumstances, I have asked them to consider urgently the possibility of an early resumption of loan approvals. I hope that they will respond favourably to this request and that the loans situation will, as a result, improve in the near future.
Deputies will be aware of the increases in the maximum loan and income limits applicable to local authority house purchase loans which I announced on the 25th May last. The maximum loan which local authorities may advance has been increased from £3,800 and £3,400 to £4,500 in all areas. The qualifying yearly income limit for house purchase loans has been increased from £1,800 to £2,000.
I am grateful to the Minister for the supplementary information about local authority loans which are not at all involved in this question——
They are involved in my question. Questions Nos. 7 and 8 are being taken together.
Is the Minister aware that the situation with regard to people wishing to purchase houses through the building societies is at a crisis stage? At present building societies are refusing even to issue application forms to prospective borrowers, never mind processing applications for loans. Is the Minister prepared to accept the situation where he has made Exchequer moneys available to building societies to enable them to attract deposits while, at the same time, they are not issuing one single loan to the public?
All I can say is that the Deputy does not read the right paper. If he looked at today's Irish Independent he would find the following: “Speaking at the opening of a branch office of the First National Building Society at Ballsbridge——
Is the Minister in order in quoting at Question Time?
——the Minister expressed the Government's unswerving determination——
On a point of order, I name the Minister for disorderly behaviour.
The Chair will decide that.
Further arising out of the Minister's reply——
The Minister has not replied to my question.
The Minister has made it quite clear that the Government are going to press ahead with the enlarged housing programme. We know that at the moment there is some difficulty with regard to building societies. Yesterday the Minister stated quite categorically that the Government will act if an improvement does not immediately take place as a result of the action already taken in providing a subsidy for the building societies. We have nailed our colours to the mast in this regard. I would express the view to the House that Deputy Haughey's questions here are not helping in relation to the depositors whom we should like to see invest in the building societies. In fact, he is doing a grave disservice to the country generally——
Et tu, Brute.
He knows he is doing a grave disservice to the country and he should be ashamed of himself.
Is the Minister trying to make excuses even at this early stage by blaming somebody for possible future failure by the Department?
The Chair would like to pass to the next question.
I am at a loss to understand the outburst of the Minister for Defence in this regard. I have no idea what he is referring to——
Will the Deputy please put a question?
If the Minister is going to attack me in this way and if the Chair is not prepared to defend me, I think I am entitled to defend myself.
The Chair will defend every Deputy but this is not the place or the time for a debate.
I should like to know from the Minister if any moneys have yet been made available to building societies under these subvention provisions and, if so, how much? I should also like the Minister to state if there is any prospect of the building societies re-opening their lending capacity before next September?
In the quarter ended 30/6/72 the net increase in shares and deposits was £10.8 million. On 30th September, 1972, it was £8.9 million. On 31st December, 1972, it was £7.4 million. On 31st March, 1973, it was £6.9 million. Loan applications on hand: £30 million for the first quarter mentioned: £33 million for the second; £37 million for the third; and £35 million for the fourth. Those were the approved loan applications on hand.
The unapproved ones not dealt with were, in each quarter, £5 million, £3 million, £4 million and £4 million. The grand total is the total of the two. The weekly returns supplied by the societies since the introduction of the subsidy arrangement which the Government provided suggest that it has halted the fall of investment in the societies. The net investment in March, 1973, was £1.4 million; in April, 1973, £1.5 million; in May, £2.3 million; and in June, £3.5 million. In view of the improving situation the societies were asked on 17th July, 1973, urgently to consider the question of approving new loans and to furnish a reply as soon as possible, so things are not so bad.
The situation is that not one single loan is being issued at present. You cannot blame 16 years of Fianna Fáil Government for that one.
Deputy Cunningham for a final supplementary. The Chair must get off this subject.
The situation is——
The Chair must be obeyed. I have called Deputy Cunningham.
Does the Minister consider that what he has just said is of any benefit to the three classes of people seeking loans: those who write to building societies, those who apply for forms—and in both cases no information whatever is given—and those who have had loans sanctioned but no payments made? These three categories constitute a very large volume of people. Surely it is not enough to leave them waiting for some definite information?
I do not accept that what Deputy Cunningham has said is true. Everybody knows that there is delay in the payment of loans, usually caused by legal difficulties. I have no hesitation in saying that at the moment the building societies are crowded with applications for loans. The Government have nailed their colours to the mast and they will provide the money one way or another.
Question No. 9.
But no loans.
The Deputy is not helping.
We are trying to help the people who are waiting.
The Chair has called the next question.
On a point of order.
I am certain it is a point of disorder.
On a point of order.
Let us hear it.
One supplementary question was asked.
The Chair is in control of Question Time and I have called the next question.
Deputy Brugha was on his feet.
The Deputy is being disorderly and must resume his seat.
Deputy Brugha was on his feet.
I am aware of that fact.
You ignored him. He is entitled to ask a supplementary question.
The Chair gave the utmost latitude to Deputies Haughey, Cunningham, O'Connell and others.
One question was asked.
The Deputy is being disorderly and must resume his seat.
He is not. He is looking for fair play for all Deputies.
Next question.
In view of the unsatisfactory nature of the Minister's reply I propose to raise this question on the Adjournment.
The Chair will communicate with the Deputy.
