The total housing provision of almost €2 billion in 2005 — Exchequer and non-Exchequer — for social and affordable housing will enable my Department to continue to fund a diverse range of housing programmes to assist low-income to modest income groups who cannot access housing on the open market. The Government has placed a particular emphasis on ensuring that access to affordable housing is made available through a number of targeted schemes. These include the tenant purchase scheme, the shared ownership scheme, the 1999 affordable housing scheme and, more recently, affordable housing through Part V of the Planning and Development Acts 2000 to 2002 and the Sustaining Progress affordable housing initiative.
Part V of the Act, which deals with housing supply, came into force on 1 November 2000. It was amended in December 2002 to ensure increased delivery of affordable housing in a more efficient and effective way. From 2002 to the end of June 2004, a total of 209 affordable units and 106 social units was acquired by local authorities under Part V agreements with developers. An eligible person for affordable housing in the context of Part V is a person who is in need of accommodation and whose income is not adequate to meet the payments on a mortgage for the purchase of a dwelling unit to meet his or her accommodation needs because the payments calculated over the course of a year would exceed 35% of that person's net income. In determining the eligibility of a person, the local authority must take into account the annual net income — that is, gross annual income net of income tax and PRSI — of the applicant and half the annual net income of any other person who might reasonably be expected to reside with the eligible person and contribute to the mortgage payments.
On the shared ownership and affordable housing schemes, I have already announced increases in the income limits in July of this year. The eligibility limits for applying for the 1999 affordable housing and shared ownership schemes are now €36,800 for a single income household and €92,000 for a two-income household, using the formula of two and a half times the main income and once the second income.
At the time of the review, I also increased the maximum loan that can be advanced for a local authority house purchase from €130,000 to €165,000 and extended the period for which local authorities may advance loans from 25 years to 30 years. It is a matter for local authorities, in operating the schemes, to determine the maximum house price limits having regard to, inter alia, the ability of applicants to meet the mortgage and rent commitments involved.
The deposit required by applicants under the 1999 affordable housing scheme and Part V affordable housing scheme is 3% of the purchase price. Applicants under the shared ownership scheme are normally required to have a deposit of €1,270 but a local authority can decide to waive this condition.
The tenant purchase scheme is available to those who have been a tenant of a local authority house for at least one year. They may apply to the local authority to purchase the house either outright or by way of shared ownership. The purchaser receives a discount of 3% of the value of the house for each year of tenancy, up to a maximum of ten years, of a local authority house plus €3,809. Over 1,500 local authority houses were sold to tenants in 2003.
Under the 1999 affordable housing scheme, a mortgage subsidy is payable to qualifying households based on income bands. A similar subsidy applies under the shared ownership scheme towards the rent payments for that portion of the equity not yet purchased. The qualifying income limits and the amounts of the rent and mortgage subsidies under the shared ownership and affordable housing schemes, respectively, were increased four years ago for all transactions completed on or after 15 June 2000. They are now set as follows.
|
Household income per annum
|
Mortgage/rent subsidy payable per annum
|
|
€13,000 and under
|
€2,550
|
|
€13,001 to €15,500
|
€2,300
|
|
€15,501 to €18,000
|
€2,050
|
|
€18,001 to €20,500
|
€1,800
|
|
€20,501 to €23,000
|
€1,550
|
|
€23,001 to €25,500
|
€1,300
|
|
Over €25,500
|
Nil
|
There is also a mortgage allowance available to those vacating local authority dwellings but this is not based on incomes.
Over the coming years, the availability of affordable housing options will be further expanded with units coming on stream through Part V of the Planning and Development Act and the affordable housing initiative. The terms and conditions of all of these schemes will continue to be kept under review and in particular, the Housing Forum has been charged under Sustaining Progress to review the effectiveness of all social and affordable housing programmes.
