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Shared Ownership Scheme

Dáil Éireann Debate, Wednesday - 27 January 2021

Wednesday, 27 January 2021

Questions (306, 307, 308)

Eoin Ó Broin

Question:

306. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage if Dublin City Council issues loans under the shared ownership scheme of 2003 to 2010 greater than the amounts permitted both in terms of the overall lending caps and the loan to income limits; if this matter was ever examined; and if he will make a statement on the matter. [3628/21]

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Eoin Ó Broin

Question:

307. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage the reason the Dublin Docklands Development Authority, DDDA, offered affordable homes, under the 2003 to 2010 shared ownership scheme, at a more advantageous price and interest rate than Dublin City Council. [3629/21]

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Eoin Ó Broin

Question:

308. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage the reason the shared ownership scheme from 2003 to 2010 had an increasing interest charge on the shared equity rent repayment that left the purchaser with a larger level of monthly mortgage repayment compared with a standard mortgage. [3630/21]

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Written answers

I propose to take Questions Nos. 306 to 308, inclusive, together.

The "Shared Ownership Scheme" was a national scheme introduced by the Department of the Environment, Community and Local Government in 1992. Local authorities administered the Scheme in each of their administrative areas. The Shared Ownership Scheme was discontinued in June 2011 by the then Government.

The Shared Ownership Scheme was a housing scheme which facilitated access to full home ownership in two or more stages to persons who could not afford full ownership immediately. The applicant initially acquired a share of between 40% and 75% in a dwelling and rented the remainder from the local authority with an undertaking to acquire the remaining equity within a 25/30 year period.

There were two types of shared ownership loans. "Pre-2002 Index Linked shared ownership loans" and ‘post-2002 shared ownership loans’. Loans were made-up of a loan portion and a rental (leased) portion – most were a 50/50 split. Monthly payments are made on the loan borrowing and also a rental amount was paid. The two schemes differed in how the rental payments are calculated and the effect they have on the underlying rental equity portion outstanding.

Under the Index Linked Shared Ownership Scheme which operated from 1999 until 2002 rent paid did not reduce the rental equity balance. Amendments, which came into effect on 1 July 2015, had the effect of reducing the monthly cost for borrowers and avoid increases in the rental equity balance.

The more recent shared ownership scheme that operated from 2003 to 2011 sought to address the issue of paying down the rental equity balance by providing a formalised mechanism for the borrower to pay off the rental equity portion over the course of the term of the loan agreement. In effect payments on the loan that exceed the interest rate charged go towards paying off the rental equity balance.

My Department does not have information relating to specific lending decisions in the period 2003-2010, which would have been the responsibility of the local authority or agency involved. The Dublin Docklands Development Authority administered its own affordable schemes, separate to local authorities.

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