Tuesday, 27 January 2004

Questions (803, 804)

Ciarán Cuffe

Question:

922 Mr. Cuffe asked the Minister for the Environment, Heritage and Local Government if his attention has been drawn to the fact that private lenders to the affordable housing sector under Part V of the Planning and Development Act 2000, as amended in 2002, are restricted in transacting business due to a failure to agree terms with his Department and the local authorities regarding securing a first charge on the affordable home; and the measures he intends taking to remedy this situation. [1081/04]

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Ciarán Cuffe

Question:

923 Mr. Cuffe asked the Minister for the Environment, Heritage and Local Government his plans to make private lending more attractive in the affordable housing sector rather than to impose barriers on lenders which ultimately defeat the good intentions suggested by Part V of the Planning and Development Act 2000, as amended in 2002; his views on the fact that low output would appear to contradict the spirit of the new legislation and increase reliance on the State sector to provide home loans; and if he will make a statement on the matter. [1082/04]

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Written answers (Question to Minister for the Environment, Heritage and Local Government)

I propose to take Questions Nos. 922 and 923 together.

Part V of the Planning and Development Act 2000, as amended, is currently being implemented by all planning authorities and I understand that many authorities are actively engaged with developers in Part V pre-planning discussions-negotiations. There is a considerable lead-in time to the completion of houses under Part V. The latest figures available, published in my Department's Housing Statistics Bulletin — September Quarter 2003, a copy of which is available in the Oireachtas Library, indicate that 82 houses have been acquired under Part V, a further 449 are in progress and 1,895 are proposed. This is a substantial increase in activity over 2002 and I expect this to continue with a further significant increase in output during the current year.

Mortgage finance for affordable housing provided under the Act, may be advanced by local authorities or the lending institutions. My Department is engaged in discussions with the representatives of the Irish Mortgage Council and the Irish Financial Services Regulatory Authority regarding the provision of finance by the lending institutions for affordable housing, for purpose of Part V and other initiatives. Affordable housing provided under Part V or other initiatives provides a home at considerable discount on the market price for the eligible purchaser. Therefore, to ensure that the schemes benefit, as intended, genuine first time buyers, each scheme embodies a mechanism to prevent inappropriate profits arising for the sellers of an affordable home. While my Department is not seeking to have this reflected as a first charge on the affordable house, we wish to see it having appropriate ranking to reflect the State's interest. My Department attaches a high priority to resolving the outstanding issues with the lending institutions and is awaiting the response from the most recent consultations with the Irish Mortgage Council before deciding on the appropriate next steps.