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Local Authority Housing Provision

Dáil Éireann Debate, Tuesday - 18 September 2012

Tuesday, 18 September 2012

Questions (81)

Dessie Ellis

Question:

81. Deputy Dessie Ellis asked the Minister for the Environment, Community and Local Government if his attention has been drawn to the fact that Dublin City Council has been repossessing shared ownership homes which were in arrears and instead of placing them back into the housing stock are leasing the properties on three to four year contracts. [39064/12]

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Written answers

Local authorities have long been the lenders of last resort servicing the housing loans needs of less affluent members of society. In the present economic circumstances it is to be anticipated that the ability of some borrowers to service housing loans may become restricted and that a number of loans may fall into arrears. Section 34 of the Housing (Miscellaneous Provisions) Act 2009 provides local authorities with powers to deal flexibly with distressed borrowers, and they have demonstrated sensitivity over the years in dealing with such cases. In March 2010 my Department issued guidelines to local authorities, based upon the Central Bank’s first Code of Conduct on Mortgage Arrears, which continued the tradition of handling arrears in a manner that is sympathetic to the needs of the particular household, while also protecting the position of the local authority concerned.

To reflect the content of the Central Bank’s revised Code of Conduct – which replaced the previous code from 1 January 2011 and was informed by the deliberations of the Expert Group on Mortgage Arrears and Personal Debt – my Department issued updated guidance to local authorities earlier this year in consultation with the County and City Managers Association. This will further enable local authorities to provide a range of flexible repayment options for households in difficulty.

Repossession remains extremely rare for local authority borrowers, with only 128 repossessions across all local authority areas carried out between 2005 and 2010. Clearly, where repossession does occur it is only as a last resort, and my Department is aware that it generally involves those households in arrears who refuse to engage with the local authority lender. It is generally the case that a local authority will look to sell a repossessed property on the open market as quickly as possible in order to minimise their own exposure to financial loss in respect of the loan finance provided through them to the borrower.

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