Brendan Howlin
Question:41 Mr. Howlin asked the Minister for the Environment and Local Government his views on the joint ownership mortgage scheme recently proposed by the Bank of Ireland; and if he will make a statement on the matter. [6168/99]
Written Answers. - House Purchase Schemes.
The Bank of Ireland have made proposals for a shared ownership scheme with the bank providing a 20 year fixed rate mortgage to cover 60 per cent of the purchase price of a house. Under the proposal, the State would fund 35 per cent and the prospective purchaser would fund the remaining 5 per cent of the cost. The equity held by the State would be remunerated by an annual rent and capital value escalation on purchase of the equity outstanding. This would require the purchaser to make a large payment in respect of the State held equity at the end of the loan period, or earlier purchase of the equity.
I am concerned that this proposal does nothing to increase the supply of housing and by adding further to demand in the market would lead inevitably, in current market conditions, to price increases at the lower end of the market. I believe that the bank acknowledges that an increase in housing supply is a necessary prerequisite at this stage to a financial package such as this.