asked the Minister for the Environment if, in view of the extended difficulties in the availability of bridging finance, he will authorise local authorities to advance SDA loans and low rise mortgage scheme loans directly to mortgages to enable payment in phased amounts of the necessary sums required to close sale where the purchase is being completed with either an SDA or LRM loan.
Ceisteanna—Questions. Oral Answers. - Mortgage Scheme Loans.
23.
Housing authorities are empowered, and it is their practice, to pay SDA or low-rise mortgage loans in instalments as the building of a house progresses providing, of course, that the loan applicant has clear title. In cases of loans in respect of previously-occupied houses, such loans are paid in one instalment on clearance of title.
I am grateful for the Minister's reply. Is he aware that not every local authority is complying with the practice he referred to? May I ask him, on behalf of such applicants who are in those local authorities, to issue a housing circular to all local authorities clarifying the position? With regard to the purchase of second-hand houses, where local authority loan applicants must by definition go on bridging finance to clear the title, would he look at this situation to get over the problem of bridging finance?
With regard to second-hand houses, on completion of sale the money must be paid. That is a legal matter. With regard to some local authorities not complying with that facility, I will issue a circular to all local authorities but I am not aware of any particular local authority at this time not complying with that facility.
In relation to second-hand house purchases, and this is an administrative problem, would the Minister have his Department and the local authorities look at the question and try to eliminate the necessity for bridging finance?
The bridging finance may not be necessary if, for instance, on the day of closure the local authority make the money available to the applicant thus ensuring that he need not go to the banks. This can be done by the two solicitors involved.
The local authority will not do that.
The two solicitors, in co-operation with the local authorities, may do it. Local authorities will furnish deeds of places they are selling on an undertaking from a solicitor that he will take responsibility.
Did the Minister ever consider the possibility of cutting out bridging finance altogether in a situation where there was an undertaking from a solicitor, backed and indemnified possibly by the law society? This would cut out the whole problem of bridging finance as far as local authority purchasers are concerned.
There would be no need for bridging finance if local authorities made cash available on completion of sale.
Is the Minister aware that much of the problem in getting the title from the local authority solicitor arises because there is a hold-up in the Revenue Commissioners, Valuation Office, Land Registry or Land Commission, or some other place? Would he not consider that there is a case to be looked into in regard to having the local authority advance the money to the purchaser on an undertaking from the solicitor to furnish the title when it is cleared by the various Government offices? Would this not solve a lot of problems and save the buyer the bridging interest?
It would, but the local authority must be satisfied that a clear title will be made available. If the solicitor could convince the local authority of that, it would be a matter to be decided between them. The local authority's legal adviser must be satisfied that title is available or will be furnished.
The Minister is inclined to nibble at my suggestion. If the solicitor in that situation were prepared to give a certificate of title to the local authority——
This is an argument.
No, it is a suggestion. This is very complex and very important. If the solicitor were able to give a certificate of title, possibly to the effect that the title would be cleared once it had been registered in the Land Registry, and if at the same time he was prepared to give an undertaking to the local authority, would the Minister not see that that could be an arrangement whereby at that stage a local authority could release the funds and so avoid the necessity of bridging finance?
I would have to look at this in greater detail to see what implications are involved for the local authorities because we are tied by legislation.
I have drawn the Minister's attention to this problem. There is, I believe, a genuine administrative solution to the problem of eliminating the need for bridging finance in this sector of the housing market. In view of the absence of such bridging finance for some people, would the Minister look at this administratively? He has enough experience to know what the pitfalls might be.
Yes.
(Cavan-Monaghan): Why can the local authority not advance this bridging finance on the same security the banks expect?
With regard to new houses, provided proof of title to the site is available, the money will be made available. In the other case, they will make part payments. The other question is that of furnishing title of not only the site but the house. This is a legal transaction——
Title to the house is title to the ground.
We are having a debate.
(Cavan-Monaghan): The Minister must understand that the bank are expected to advance a bridging loan on certain securities before the title is completed. Why can the local authority not advance the money on the same securities?
The bank can act on their own initiative but a local authority are bound by legislation involving SDA loans and regulations.
(Cavan-Monaghan): Not true.
Which the Minister controls by order.
That is the point.
They could be covered by appropriate indemnities.
24.
asked the Minister for the Environment if he will raise the limit of the SDA and low rise mortgage scheme loans from £9,000 to £12,000 and raise the income limit to £5,000.
While I have no immediate proposals to increase the loan and income limits, I am keeping the matter under continuing review.
How long is this review likely to last? Will the Minister not agree that in a situation where the cost of housing has risen from £14,000 to £23,000 in the two-and-a-half year period he has been in office, albeit with the increase in the SDA loan limit, now is the time to end the review and increase the loan?
The Deputy will appreciate that twice since I became Minister the review ended and the loans and limits were increased.
(Cavan-Monaghan): So has the price of houses, drastically.
26.
asked the Minister for the Environment if payment of the £1,000 new house grant is being denied to persons who must dispose of their dwelling house, due to job transfer or other reasons, before the grant has been received.
It is a condition of payment of the £1,000 new house grant that the applicant occupies the house on completion as his normal place of residence. Provided this, and the other conditions of payment have been complied with, payment of the grant would be made to the applicant.
For how long is it necessary to occupy the house?
He must be in occupation on a yearly basis. There is a difference between that and a holiday type home.
Will the Minister clarify the expression "on a yearly basis"
A yearly basis is a permanent basis when the grant is paid. It is not on a holiday basis.
The Minister is either deliberately or, I hope, accidentally missing the point of the question which is not a question of a second or holiday home but of someone who built a house—I have three people in mind—and who, shortly after going into occupation, was transferred from his job. I am aware that there are difficulties in obtaining the grant in that situation and why is this so?
The grant was not paid before the person was transferred?
The scenario is as follows: house built, usual delay in payment of grant, person in occupation, gets a transfer in his job, grant refused.
Grant refused?
Yes.
Was the house completed?
Yes.
And the person in occupation?
Yes.
Was it passed for payment as completed and was the person also in occupation? There is no reason why that grant should not have been paid if the circumstances are as the Deputy said.
I will furnish the Minister with three specific cases.
I should be glad if the Deputy would do so.
One involved a doctor, another a creamery worker and the last a person in another occupation. They had to change their houses after completion and going into occupation but before receipt of the grant.
Were they in occupation for payment of the grant?
After the house was built.
They did not comply with the occupation clause that for payment of the grant one must be in occupation.
That clause was not in the manifesto.
It is in the grant.
They built the houses and went to live in them.
At the time of inspection were they in occupation?
In one instance the inspection was delayed for six months and they had left at that point. Will that preclude them from payment of the grant?
They did not go into occupation?
Yes, they were in occupation.
Let me have details and I will examine them personally.
Will the Minister accept that where a person builds a house and goes into occupation and where he has to move to another town and sells the house he will not be denied the grant because of delay in either the inspection or issuing of the grant?
I will.
I will give the Minister details.