asked the Minister for Finance if his attention has been drawn to the difficulties being experienced by house purchasers and builders as a result of the credit squeeze on bridging finance, and the action being taken by his Department to ensure that house purchasers will be assisted in obtaining bridging finance.
Ceisteanna—Questions. Oral Answers. - Bridging Finance.
17.
I am advised that, while the conditions applied by the main banks have been tightened, bridging facilities continue to be available. This is in accordance with the emphasis being given to the productive sectors of the economy and housing within the Central Bank's overall credit guideline.
Might I ask the Minister what is the source of that advice and if he could make it available to Deputies so that, in turn, we could direct our constituents who cannot get such bridging finance facilities?
The latest figures available on this showed that the amount of bridging accommodation outstanding by the associated banks was £182 million at mid-August, representing an increase of 70 per cent over mid-August 1978 and 43 per cent over mid-February 1979. The basis for the statement I have made here is the Central Bank's guideline and the assurances given by the associated banks to the Central Bank.
Has the Minister received representations from the Construction Industry Federation, small builders' section, in relation to the problems their members, and consequently the public at large, are experiencing as a result of the credit squeeze on bridging finance?
I do not recall receiving any formal representations of the kind mentioned by the Deputy. I have had some individual representations.
Question No. 18.
I am not fully aware of all the nuances of what formal notification might mean as distinct from informal representations from a number of sources.
The Deputy mentioned an association.
Could the Minister make it quite clear, in his capacity as Minister for Finance, to the associated banks what is the Government's attitude specifically to bridging finance for first-time purchasers of houses and if the Government, through him, have any intention of making it possible for first-time purchasers to obtain bridging finance, which is something many of them cannot do at present?
Hear, hear.
May I answer this question first. I have already taken steps to make the Government's attitude clear, through the Central Bank, to the associated banks. I am pursuing that matter. I regard the provision of bridging finance as very important in a number of contexts. I have already indicated that the amount outstanding on the latest figure we have, which was mid-August, was 70 per cent higher than the same period last year. Also the Deputy will be aware that the various indicators in regard to cement sales, house completions, the availability of money from building societies, all indicate a high level of completion, so that if there are difficulties, they are difficulties which have arisen very recently. But, in so far as such difficulties have arisen, I am trying to keep a close eye on the situation. If there are problems arising which should not have been arising—in the context of the overall credit guidelines—then anything that can be done to remedy that will be done.
Might I ask, on behalf of many people who have contacted me directly, if the Minister and the Government intend, or do not intend, to issue a new directive or new request in relation to credit finance that will make it possible for first-time house purchasers to get bridging finance? Could the Minister be specific in the sense of requesting the Central Bank, in turn, to request the associated banks to make that facility specifically available?
I am not aware that that facility is not available.
I am saying——
Is the Deputy saying it is not available to anybody?
I am saying in the capacity that any Opposition Deputy can say—and I think the Minister can appreciate that—that many first-time house purchasers, as of now, as distinct from August, are finding it impossible to get bridging finance.
The Deputy is entering into argument.
I do not wish to be argumentative, I am making——
The Chair is concerned with the fact that there are over 400 questions on the Order Paper and in almost an hour we have done only 16.
Perhaps the Chair is also aware that I have withdrawn most of mine for written reply. Finally might I ask the Minister if the Government intend to make special provision for bridging finance for first-time house purchasers?
I have already indicated that I regard the provision of bridging finance as very important in a number of contexts. I have indicated that the figures available to me show that the finance available for bridging finance was very substantially, in fact 70 per cent, higher than the corresponding period last year——
For August.
——and that I have made further inquiries in regard to the position since then with a view to trying to ensure that there is no undue restriction in regard to bridging finance.
Is the Minister aware that there is a great danger of there being quite a crisis in the building industry in the not too distant future, despite the figures there to support his point of view just expressed, and whether in relation to this bridging finance and other loans, this global loans scheme about which we were talking in an earlier question might not be introduced in some way to try to help out in this very critical time?
The Deputy will be interested to know that in regard to the SDA Loans Scheme local authorities are making arrangements to pay the loans in more instalments than heretofore in order to try and help in this difficulty. I do not want to be repeating myself. I have already made it clear, I hope, that I regard the provision of bridging finance as very important and am paying particular attention to it.
May I just ask the Minister if he would accept that in many of these instances, unless bridging finance is provided to later purchasers of houses who are moving, it becomes impossible for the first purchaser to acquire the house and that the question of bridging finance cannot be confined to first-time purchasers for this reason?
The majority of first-time purchasers are buying new houses, when it does not apply.
But there are quite a number who are not. The problem is a little more complex. Might I ask the Minister in particular whether he has——
I think the problem to which Deputy FitzGerald is referring is much more serious than the one to which Deputy Quinn is referring because there is money available from the building societies for the first-time purchaser and his problem, if he does not get bridging finance, is not anything like as difficult as the one to which Deputy FitzGerald is referring.
I feel there is a particular problem there and I am glad the Minister recognises that. Might I ask the Minister whether he has looked into the question of whether the very rapid increase in the amount of bridging finance provided—combined with the fact that it is still very short and is causing a holdup in the building industry—is due to any extent to a slowness in the processing of applications by building societies? Is he satisfied that the speed with which they are acting is not such as to create an unnecessary problem in the bridging finance area?
I have made inquiries in that regard, and it has been pursued by my colleague, the Minister for the Environment. While there are cases of delay, the statistics would not indicate that there is any undue delay in the average case. The Deputy will be aware that there are factors contributing to delay outside the building societies.
I want to ask a question——
We have had sufficient elaboration on this question.
I wanted to ask the Minister whether he is aware that the extra money that is out on bridging finance at present from the banks is caused largely by the very big increase in the cost of houses, and whether he is aware that the banks have now been telling their customers, as they have told me, that no new bridging facilities will be available——
Question No. 18.
——for house purchase at the moment.
If the Deputy will give me any evidence of a statement like that by any bank or bank employee I would be glad to get it because it is totally contrary to the instructions and assurances given by the banks to us.
That is what they have told me.
Tell me who they are. A Cheann Comhairle, will the House be completing questions?
Completing questions?
There are only three more questions.