asked the Minister for the Environment the Government's attitude to the encouragement of the building societies in respect of loans for flats; and if the Government have any proposals to assist in the purchase of flats by young couples.
Ceisteanna—Questions. Oral Answers. - Building Societies.
16.
The question of making loans available for the purchase of flats is a policy matter to be determined by each building society and one in which the Government do not propose to intervene. The five largest societies make loans available for the purchase of flats. However, I understand that they have experienced difficulties on issues such as title, management and insurance. Where these difficulties can be resolved, loans are advanced. The £1,000 new house grant, introduced by the Government in July last, is payable in appropriate cases in respect of the purchase of flats.
Is the Minister saying that building societies do not distinguish between loan applications for houses and for apartments and flats?
I have said that the five largest societies make loans available for the purchase of flats.
But they do not do so as easily, as quickly or as willingly as for private houses.
For very good reasons. There are various issues involved. There is title, there are insurance problems. They are two major problems, particularly title.
Will the Minister agree that the would-be purchaser of a flat is as much entitled to consideration as the would-be purchaser of a house? Would-be flat purchasers are motivated by the same desire to own their own dwelling. Therefore, should they not have the same rights under the law as people who want to buy houses? What are the Minister and the Government doing about ensuring that the building societies give equitable treatment in this respect?
Security for a house loan includes such aspects as title, and insurance. This must be covered in the mortgage to ensure that the loan is secured and that the money lent will be recoverable. There are security and other complications involved in making loans for single flat units which do not arise in the case of loans for the purchase of houses. Section 79 of the Building Societies Act, 1977 obliges every director of a society to satisfy himself as to the adequacy of the security offered, thus underlining the importance attached to this aspect.
Is the Minister there-fore suggesting that in any case, whether it be a house or a flat, the building societies advance money without having adequate title?
I did not say so.
This does not arise out of the question.
It is relevant to this question. The Minister said that the problem relates to title. Why then should there be differentiation between houses and flats when title has to be offered as a security in respect of both.
(Cavan-Monaghan): I wish to ask one supplementary.
There is an element of irrelevancy being introduced which i must nip in the bud.
In regard to the Deputy's supplementary, I did not say what he attributed to me. Building societies have experienced difficulty in establishing title in regard to flats. This is the experience of the five big building societies. They give loans for flats.
If the title to a flat is known would the Minister ensure that it will be treated in the same way as a dwellinghouse?
I have stated that many of the building societies have experienced difficulties in relation to flats which they have not experienced in relation to houses.
That is not the same as saying that they are treated in the same way.
(Cavan-Monaghan): Is the Minister aware that one of the five big building societies discriminates against applications in respect of flats, that that society has a different policy, that I had to make representations on behalf of an applicant only a few hundred yards from this House and that in reply to those representations this building society admitted that it had a different policy in respect of flats and that it was reviewing it? Does the Minister know whether that building society has reviewed that policy and whether that building society, apart from title and insurance and these matters which are purely auxiliary, will apply a similar policy to applicants for flats?
I am not aware a building society was discriminating. Now that the Deputy has told me about it I will make inquiries. My information is that the five larger societies make loans available for the purchase of flats.
(Cavan-Monaghan): I am speaking about one of the societies which publicises most.
If the Deputy will let me know——
Why should he? The Minister should have found it out.
I have given the information available to me. If I am given any further information in this House I will follow it up and use it. This has been the practice in the House.
(Cavan-Monaghan): If the Minister will refer to his officials he will find out that I made representations within the last couple of months.
Instead of describing the attitude of building societies, could he indicate the positive steps the Government will take to encourage building societies, and will that include writing to the major societies pointing out the substantial tax advantages they have under legislation and asking them accordingly to change their regulations, including the one Deputy Fitzpatrick referred to, so that the disabilities described will be removed?
The disabilities I have described are as a result of the experience of the building societies with regard to title, insurance and so forth. The question about the tax concession to these societies should be put to another Minister.
That is the second question the Minister has avoided.
I have been obeying the Chair.