asked the Minister for the Environment the total number of mortgage loans for houses paid out for each of the last three years; and if he is satisfied with the numbers presently being paid out.
15.
Ceisteanna—Questions. Oral Answers. - Mortgage Loans.
14.
asked the Minister for the Environment the steps which are being taken to increase the total funding and number of house loan mortgages.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 14 and 15 together.
The total number of mortgage loans for houses paid out in 1975, 1976 and 1977 was 21,241, 22,051 and 21,777 respectively. The number of loans paid in the first half of 1978 was 11,118 and this, together with the increase in approvals during that period, suggests a satisfactory outturn for this year.
As regards the total funding of house loan mortgages, the Deputy will be aware of the increase in the public capital provision for local authority house purchase loans—from £17.66 million in 1977 to £39 million in 1978—consequent on the Government's decision to increase the loan limit from £4,500 to £7,000 and the income limit from £2,350 to £3,500 a year with effect from the 26 May 1977. The recent decision by the Government to further increase the loan limit to £9,000 is expected to result in increased expenditure next year.
The moneys available from building societies for house purchase loans are dependent on the societies' ability to attract funds from investors. In this connection, I would like to point out that the net inflow of funds to societies up to 31 October this year showed an increase over the same period last year.
I understand that the Minister for Industry, Commerce and Energy is having discussions with representatives of the assurance companies with a view to securing an increased input by the companies into house-purchase loans.
As regards bank loans for house purchase, the number of loan payments made up to 30 June this year was about 12 per cent down on the number made during the same period last year. However, the number of loan approvals during the same period increased by 28 per cent over last year's figure so loan payments should increase in the coming months. The Deputy will also be aware that bank loans for house-purchase have been excluded from the credit restrictions recently imposed by the Central Bank.
Does the Minister accept that implicit in the figures he gave us is a clear inability of the number of mortgages being made available to cope with the increased demand, in fact that there is a slump becoming evident, particularly in view of the increasing numbers of people who seek mortgages? Is the Minister aware of this, is he concerned about it, and if so what new action does he propose to take?
I have spelled out the action that has been taken in order to make funds available and the increased amount of money available for these loans. As I said in my reply the number of loans for the first six months of this year—11,118—compares very favourably with previous years. Therefore, there is no falling back there. It is anticipated that the numbers for the second half of the year will be even greater.
Would the Minister be good enough to explain why it is that the number of applicants for local authority houses has increased in the last six months in the order of 30 to 35 per cent? Why is this if there are sufficient numbers of mortgages available?
I have not the figures for the increase in the number of applicants——
I have.
But the figure that would be more relevant with regard to local authorities would be the number of approvals, not the number of applicants.
Is the Minister aware that, for the first time in years, the term "loan famine" is current amongst people seeking mortgages from building societies? If the Minister is so aware does he accept that the dramatic increase in the number of applicants for local authority housing is a direct reflection of the inability of these applicants to get local authority mortgages? What direct steps does the Minister propose taking with regard to trying to make more money available for people seeking home loans from the building societies? For example, does he propose to give them any more money to subsidise increased rates of interest? What proposals has he to give more money to local authorities, because the provision about which he spoke is clearly not adequate? For example does he consider making more money available to housing co-operatives, or what other positive steps does he propose taking in view of the clear facts available, despite the gloss he puts on the figures?
With regard to the last part of the Deputy's question on what I intend to do, that is a budgetary matter in regard to the amount of money to be made available for next year. I have seen reference to the term "loan famine"—used by the Deputy—in the newspapers. The number of applicants did increase rapidly, I agree with the Deputy, but I look steps to deal with that by insisting that 60 per cent of the loans made would be in respect of loans up to £13,000 and a further 20 per cent under £16,000; that is a total of 80 per cent. In general the building societies—we will come to them in a later question—have complied with this. That is having an effect. The imposition of a CRV for a building society loan—which we will come to also some time later, some day—is also having the desired effect. These steps are being taken for a trial period up to 31 March next and we have no reason to think they are not working reasonably well.
Would the Minister not accept that the problem is not really a shortage of money in building societies but the sharp increases in the cost of houses in the last 18 months? Is that not really the problem?
Sin ceist eile, surely, if there is any such thing as ceist eile.
It is the ceist.
We will be coming to that in later questions.
No, sir, it arises out of this question.
I do not see how it arises out of the question.
Arising out of the Minister's earlier replies, he mentioned the question of SDA loans and the increase in applications: would the Minister not accept that the circular sent by his Department to local authorities on 31 August asking that a P.60 tax form be required now before applicants can qualify for a loan has eliminated a lot of people from qualification for a loan and if he will not review his Department's policy in that regard?
Very many local authorities were using this procedure already. However, it is a question of the local authority allocating loans to people who are entitled to them. If I may point out again, the important fact is that the amount of money made available went from £17 million to £39 million in this year alone.
(Interruptions.)
It is not even in line with inflation.
Seventeen million pounds to £39 million in one year.
Would the Minister be able to say if he has received representations from local authorities that people who are earning under £67 per week—the figure they must earn to qualify for a loan of £9,000—are unable to pay £22 per week for 30 years on that loan? Is the Minister aware also that if they have a lesser income than £67 a week, as many of them have, the amount they can borrow is much less than £9,000? Does the Minister realise that raising the loan to £9,000 for people who are earning only up to £67 a week is just another gimmick which is not doing one damn thing for those who are looking for houses?
There has been no drastic departure in the manner of measuring an applicant's ability to repay a loan with regard to this £9,000. With regard to the applicant's ability to repay a loan, the procedure has always been to grant two-and-a-half-times his or her earnings; two-and-a-half-times £3,500 is £8,750 on a quick calculation; anyway it is around that figure. Therefore, there has been no serious departure, none whatsoever.
Does the Minister think they are able to pay £22 a week out of £67?
The procedure always was to grant a loan of two-and-a-half-times an applicant's income. There has been no departure at all there.
The Minister must be aware that local authorities have recommended that the figure of £3,500 being the ceiling for county council loans is not keeping pace with the increased amount allocated. Bearing in mind that most local authorities are represented by members of the Minister's party who support this type of thinking does the Minister not consider that having a ceiling of £3,500 annual income means that anything in excess of that deprives anyone applying for a local authority loan?
There is nothing on the Order Paper on local authority loans.
Yes, there are housing loans and I take it the Minister for the Environment is responsible for housing loans? The fact that there is a ceiling of £3,500 or, as Deputy Tully put it, £67 a week——
It is an unfounded rumour that the Minister is responsible.
Would the Minister not agree to increase the ceiling of £3,500 per year?
The maximum amount of loan went from £3,500——
£4,500.
Four thousand five hundred pounds to £9,000 in 18 months.
And house prices went from £11,000 to £20,000.
The income limit went from £2,250 to £3,500 over the same period. For two years or more it was £2,250 under the Government the Deputy supported——
Is it not time the Minister stood on his own feet and did the things he wanted to do?
(Interruptions.)
I have done far more in 18 months than the Coalition did in four years in regard to this problem.
I am sick listening to this and other Ministers saying: look what you did. It is now the Minister's job.
(Interruptions.)
The Deputy knows that.
(Cavan-Monaghan): The Minister's party promised to make it cheaper to buy houses and maintain them.
(Interruptions.)
It took the Coalition Government four years, they could not shift it, and suddenly——
The remaining questions will appear on next Tuesday's Order Paper. The Business now before the House is subject to a time limit. We are not having any further questions; Question Time is over.