asked the Minister for the Environment if his Department have any proposals to increase the income ceiling for persons applying for a loan under the SDA loan scheme.
6.
Ceisteanna—Questions. Oral Answers. - SDA Loan Scheme.
4.
asked the Minister for the Environment if he will increase the income limit and loan limit for Small Dwellings Act purchase loans.
57.
asked the Minister for the Environment if it is his intention to have the income qualification limits for SDA loans increased in line with inflation; and if he will consider having the maximum amount of loan available increased in line with inflation.
I propose to take Questions Nos. 4, 6 and 57 together.
I have no proposals to increase the income and loan limits for the SDA loan scheme but I am keeping the position under review.
Would the Minister reconsider that reply and bring forward his review of these loan limits? Traditionally, the SDA loan scheme has been the backbone for certain categories of house purchasers in enabling them to provide a place in which to live but because the limits are so low, both in terms of loan and of the income level, increasing numbers of people are having to apply for Housing Finance Agency loans. That scheme is meeting a need but in the long term these loans will impose greater burdens on houseowners who, for example, wish to sell their homes. It is time for the Minister to alter the SDA income and loan limits. When were they last increased?
The loan and income limits for local authority purchase schemes were last increased on 1 February 1984. The present limits are £16,000 for the loan and £8,000 for the income in the preceding tax year. No income limit is applicable in the case of special category loans, the figure for which is £20,000. This is applicable to tenant purchasers who surrender their houses to local authorities. It applies also to certain applicants on the housing lists.
It is more than two years since that review occurred of income and loan limits. Average house prices in that category are about £25,000, and surely it is a matter of urgency to improve the loan limit from £16,000 in view of gap between that figure and £25,000. May I ask how is it thought that a would-be purchaser could save for a deposit out of an income of £8,000? Surely we should be encouraging more people to be applying for SDA loans rather than forcing them into the HFA scheme?
There is great demand for SDA loans. Those who are local authority tenants who apply for these loans get a grant of £5,000 which can be added to the deposit. I am keeping the position under review. I am aware there is a need to expand the limits in both cases and I am looking at it very seriously. However, as a former Minister the Deputy is aware that when you change the limits you widen the group of people demanding SDA loans, and an increase in the limits would draw people away from the HFA scheme into the SDA. We must look carefully at it to see what the effect would be from that point of view.
As the Minister is aware there is a crisis in the house building and construction industry. Is this not one area in regard to which the Minister would be inclined to give this necessary boost?
I have not said that I will do what the Deputy asked me to do, though I do not oppose the suggestion. I will be looking at it carefully.
Mr. Cowen
As a result of the limits on eligibility for SDA loans are not people forced to apply for HFA loans in respect of which 80 per cent of the gross amount is repayable? In view of the fact that many of those who got HFA loans find themselves in financial difficulties, would the Minister take those people into consideration when he is carrying out his review?
I will do that.