asked the Minister for Local Government the cost per year of the repayment of a local authority housing loan of £4,500 granted in (a) May, 1975, and (b) February, 1976.
Ceisteanna—Questions. Oral Answers. - Local Authority Housing Loans.
8.
The annual repayment on a local authority house purchase loan of £4,500 advanced in May, 1975, over a repayment period of 30 years was £497.38. The corresponding figure for a similar amount advanced over the same repayment period in February, 1976, was £579.42. I might add that a local authority house purchase loan is subsidised by the Exchequer which is currently paying in excess of 14½ per cent for capital issued by the local loans fund to local authorities at 12 per cent.
The Minister has stated that the £497 is payable over a 30-year period. Why did he give a figure for a 30-year period?
It is the current period.
It was not the current period formerly. It gives a completely false impression.
That was not the intention.
I accept that it was not the Minister's intention but I am sure he will agree that if you calculate the amount payable over a 35-year period, which was the period in existence in May, 1975, you will get a lower figure than £497.
It compares like with like.
That is not so. I would refer the Minister to a speech made by him during Private Members' time last week when he stated he was anxious to encourage young people to build their own homes. Will the Minister state if he regards this increase in repayments, which was caused directly by his own and the Government's intervention, as an incentive?
As the Deputy is aware, the alternative is to move interest rates up and down, as happens with bank rates. The people who are building their own homes and who are borrowing SDA loans are on fixed repayments and they fare better than they would if the interest rates moved up and down. Is the Deputy suggesting that we should adopt that system?
The Minister has stated that the number of years he took in relation to repayment was 30 years instead of 35 years and, of course, this means that the figure would be much lower if he had taken the period of 35 years. The difference is quite exceptional. Will the Minister not agree that a young couple with an income of £40 per week who wish to build their own home are being deprived of the State grant by the Minister? Their interest rates have been increased but there has been no increase in the maximum loan or the maximum income limit. Will the Minister not agree that this is a serious disincentive to people building their own homes?
This is a rehash of what the Deputy attempted to put across last week during the debate in Private Members' time. It does not mean a thing.
I am calling Question No. 9.
The Minister has not given a reply to my question. All he can tell us is that it does not mean a thing. I would ask the Minister if he is not perturbed about the serious fall in the number of applications for SDA loans because of the increase in the interest rate?
If the position was the same as when I took up office as Minister for Local Government, namely, that the money could not be found anywhere else, I would be seriously perturbed. However, in view of the fact that the vast amount of money available for SDA loans is being taken up fully and that there are other areas where the money can be found by those who want to build their houses, I do not think the situation is as set out by Deputy Faulkner.
Will the Minister not agree that the SDA loans were intended for those least able to build their own homes? Further, will he not agree that the increase in the interest rate, plus the fact that the loan is still at the level of £4,500 since May, 1973, is ensuring that these people who were previously entitled to the loans and who were able to build their homes are unable to make use of the loans now?
As the Deputy is aware, in the Dublin area the amount being borrowed under those loans has dropped considerably but throughout the country the money is being taken up by people who want to build their own houses. Further, the Deputy should remember that if people are unable to build their own homes, I have given an extra £11 million to Dublin Corporation to provide housing for people who require it in the Dublin area.
I have already dealt with the sums of money.
I have already called Question No. 9.