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Dáil Éireann debate -
Tuesday, 20 Oct 1992

Vol. 423 No. 8

Ceisteanna—Questions. Oral Answers. - Shared Ownership Scheme.

Brian O'Shea

Question:

16 Mr. O'Shea asked the Minister for the Environment , in respect of each housing authority, (1) the number of applications received for the shared ownership home loan scheme (2) the number of such applications which have been approved (3) the number of loans which have been issued and (4) the number of house sales that have been completed; and if he will make a statement on the matter.

Brendan Howlin

Question:

17 Mr. Howlin asked the Minister for the Environment if he will give details of the implementation to date of the Programme for Social Housing; the number of families and individuals housed to date under this programme; and if he will make a statement on the matter.

Alan M. Dukes

Question:

41 Mr. Dukes asked the Minister for the Environment the take-up so far this year under the shared ownership housing scheme; and the capital expenditure which has been committed out of this year's allocation.

Patrick McCartan

Question:

47 Mr. McCartan asked the Minister for the Environment the progress, if any, made to date in the implementation of the Government housing programme announced in February 1991; the number of people who have applied for the shared ownership schemes; the number of house purchases which have been completed under the scheme; and if he will make a statement on the matter.

I propose to take Questions Nos. 16, 17, 41 and 47 together.

Details of progress by local authorities on each of the measures introduced in A Plan for Social Housing are contained in the housing statistics bulletins, copies of which are available in the Oireachtas Library. Information in relation to 1991 will be found in the Annual Housing Statistics Bulletin, 1991, and the June 1992 bulletin gives the most up-to-date information currently available. Similar information for the period up to 30 September 1992 will be contained in the next bulletin.

The 1992 capital provision for the shared ownership scheme has been fully allocated to local authorities but there is scope to reallocate capital to any local authority that may require additional resources.

Would the Minister agree that the shared ownership scheme has, in essence, been a failure and that the main reason is that applicants need reassurance regarding the long term value of the unpurchased equity of a house, in other words the part of a house that would be rented from the local authority? If we were to go through a period of high inflation, this cost would get completely out of control. Would the Minister not agree also that people are deterred by the vast volume of legal documentation involved? The scheme advertised that applicants would require only £1,000 upfront, but the legal costs are capitalised, become part of the mortgage and have to be repaid over the term of the scheme, in other words, it is a hidden cost.

I do not accept that the scheme is a failure. By 30 June 1992 local authorities had reported that more than 2,300 applications had been received. Nearly 900 of those applications had been approved in principle and 181 transactions completed. During the second quarter of 1992 there has been a considerable increase in activity under the scheme, with 112 transactions being completed in the period. That compares to 46 completed transactions in the first quarter. The capital allocation for the scheme is £35 million in 1992; in 1991 £1 million was spent. The Department make allocations early in each year and monitor expenditure at intervals throughout the year. However, the Department would not have the figure of the level of commitments.

In relation to the concerns expressed by Deputy O'Shea, the administration of the shared ownership scheme is the responsibility of local authorities. It is their responsibility to ensure that the scheme is made available in their areas and that applicants are properly advised. The system is administered by county councils, county boroughs and the Dún Laoghaire Corporation.

If the Minister of State does not concede that the scheme is a failure, would he at least accept that it is not producing results at the speed originally intended by Government? In particular, would he accept that a national scheme designed to alleviate a massive housing need cannot be shaping up to its requirement when it produces a mere 181 completed transactions?

Given the figures quoted earlier by Deputy Dukes, would the Minister accept, particularly in relation to the Dublin region where more than 90 per cent of the tenants who would be considered under the scheme are excluded because of income levels, because they are in receipt of social welfare payments or on an income level at which they could never qualify because of house prices in Dublin, that there is a need to build some variation into the scheme, if it is to work, to have consideration for the prices of houses in these areas. I understand that other areas in the country, such as Galway, have similar difficulties and where the national income at social welfare level is fixed the scheme cannot operate effectively because of the very high price of houses in urban areas.

I want to repeat I do not accept that the scheme is a failure. I would accept, however, that it was slow in getting off the ground and that in some local authority areas it could have been promoted to a greater extent. I am satisfied — and I have given the figures for the last quarter — that the scheme is a good one and is giving people an opportunity, which they would not otherwise have, to purchase their homes. I believe it is making an impact on the present housing shortage.

What about the position of those on social welfare?

Deputy Howlin is offering.

In regard to social welfare, where a person on social welfare had an income limit——

Perhaps that is a matter for the Minister for Social Welfare.

It relates to the scheme. Perhaps he would clarify it.

Perhaps I can facilitate the Deputy again but I have called a Deputy who shall be heard, Deputy Brendan Howlin.

What steps does the Minister of State propose to take to rectify an anomaly that has arisen in relation to shared equity? For example, in the borough of Wexford where the agency for shared equity approval is the Wexford County Council and the agency for loan approval is Wexford Corporation, is a dual application required? Some confusion concerning the actual processing of loans has caused great difficulty.

I will investigate that matter.

Can the Minister comment on the fact that some local authorities, one of which is in the Kilkenny area, can accommodate social welfare recipients under the scheme because of low house prices? Such a possibility cannot exist in areas where housing has a very high premium such as Dublin, Galway and other areas. Is the Minister aware of the discrepancy that exists where a vast number of the potential applicants under this scheme are automatically disqualified because of income levels?

We have ongoing meetings with county managers in relation to this scheme. As I have indicated, we were disappointed that some areas were not promoting it. I undertake to have the matter the Deputy raised examined.

May I suggest that after almost two years the scheme is a failure as some local authorities have processed no application under this scheme, at least until recently? Would he agree that it would be much more positive if the £35 million were allocated to local authorities for the purpose of building traditional local authorities houses?

I have already indicated that some local authorities have not been as positive in promoting the scheme as I would have liked. I do not accept that the scheme is a failure. Neither do I accept that the £35 million should be given to local authorities because we have a new approach in relation to the needs of housing today which is much wider. Local authorities are not the only people who should be building houses. I am satisfied that the moneys being allocated in this area and other areas of the social housing plan are worth while and are helping to broaden the way in which we attend to the needs of the people in the community most in need of housing. I am satisfied that the plan for social housing is doing that in a very positive way.

It is not working. The Minister cannot even tell us how many houses are provided.

Will the Minister clarify whether the scheme was intended for families on social welfare? Is he aware that in Dublin not a single family on social welfare has been able to avail of the scheme? If that is the case will he examine the submission from Dublin Corporation in that regard?

The scheme is for people who have the ability to pay. It is a scheme that has attracted people who could not take out a full mortgage; under this scheme they can. There is no point in allowing people to take out a mortgage today when they will be on the housing list next week. The principal criterion for eligibility is the ability of people to pay and local authorities must bear this point in mind. As indicated already, some local authorities appear to give no discretion and I will have that examined.

Would the Minister not agree that the three major difficulties I outlined earlier in relation to the scheme are inherent in the scheme and have nothing to do with how the scheme is administered by local authorities? Has the Minister any proposals in relation to the value of the unpurchased equity getting totally out of hand, in other words where the rented portion of the purchase price is affected by inflation over a period?

I disagree with the Deputy that the scheme is a failure. There are aspects of it we can examine and review and we will certainly do that. I repeat, I am satisfied that this is a good scheme. It has given people an opportunity, which they would not otherwise have, to purchase a house of their own. Certainly the shared ownership scheme has done that in a very positive way but there are aspects of it we can review.

That disposes of questions for today.

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