I was dealing last night with the purchase terms of local authority houses. I had pointed out that more than 78 per cent of rural houses had been vested already and that more than ten per cent more had vesting applications pending. I had gone on to deal with the position applying to urban houses and had dealt with the 1953 circular under whose terms urban houses could be disposed of. I had mentioned that there was another circular issued in 1956. This circular provided, as an alternative to the terms specified in 1953, that the Minister would be prepared to approve of the sale of post-1946 houses for their original all-in cost, reduced by the amount of the appropriate State grant that would have been paid if the houses had been provided by persons for their own occupation, or by the amount of the Transitional Development Fund Grant where one was paid.
Of the urban houses provided up to 31st March, 1967, schemes under the 1953 and 1956 circulars applied to 23,014 houses. As I have said, of these, only 7,100 had been sold up to that date and it is estimated that a further 2,000 houses will be sold during 1967-68 on foot of applications to purchase received by the local authorities prior to 30th September, 1967, which was the last date for receiving applications.
The Association of Municipal Authorities passed resolutions which indicated that with the rise in prices and the tendency for local authority rents to remain static, these minimum terms gave very low sale prices. There are, in fact, instances of houses sold under the sale schemes to tenants being resold by the tenants fairly soon after purchase for three, four and five times, which was fairly normal, and in some cases for up to ten times the price paid for them to the local authorities. The valuation by the Valuation Office on certain houses proposed to be included in sales schemes in urban areas indicates that the prices proposed were often as low as one-ninth or one-tenth of the current value of the houses.
I find it surprising that some Deputies are so completely irresponsible and so unconcerned with the magnitude of the housing problem as to advocate the continuance of this improvident dissipation of valuable housing stock. It was because of this experience that houses were being disposed of at giveaway prices; and on 23rd December, 1966, I notified local authorities that it was not intended to approve of further schemes for the sale of urban houses on the terms laid down in the the 1953 and 1956 circulars, but tenants of houses to which existing schemes applied were given up to 30th September, 1967, to apply to the local authorities to purchase under the schemes if they so wished. That was a period of slightly more than nine months.
In respect of urban houses, terms for their sale under section 90 of the 1956 Act, which I have indicated I will be prepared to approve in purchase schemes made by local authorities, provide for a discount from market or replacement value of two per cent for each year more than five years during which the tenant has been in occupation of a local authority house, subject to a maximum discount of 30 per cent. Nobody can claim that these terms are less than generous to the tenants concerned. At the same time, I think they are also fair to the other people who are involved.
This means that a tenant in a house that is valued at £1,800 can purchase it for £1,260 if he has been in occupation for the requisite period. As I say, I am satisfied that those terms will present a fair balance as between the tenant wishing to purchase his house and the local authority which provided it and which must continue to provide houses to meet the needs of those without adequate accommodation. The local authority represents the general ratepayers and the taxpayers for whom Opposition Deputies at the appropriate time, that is, the time they consider appropriate, show such great concern.
I may say I provided that capital receipts from the sale of houses must be used to finance the construction of further houses either by the local authority directly or by private builders with the aid of grants and loans from the local authorities. There will thus be no net diminution as a result of sales in the local authorities' ability to deal with the housing needs of their areas.
The suggestion has been made that in calculating sale prices an allowance should be made for the amount paid by the tenant in rent. This suggestion will not stand up to examination. It must be remembered that substantial annual subsidies are paid for every local authority house built. The rent usually does not cover even the loan charges on the capital from which the construction of the house was financed, not to mention maintenance and administrative costs, which are borne by the local authority. In fact, the argument could be advanced that the longer the tenant has been in the house, the more subsidies he has received and the price of the house, if he wishes to buy, should therefore be adjusted upwards rather than downwards according to the length of his tenancy.
The terms which have been circulated to local authorities are based, as I said, on the desire to be fair to the tenant genuinely wishing to purchase the house for his own use and at the same time, ensuring that the local authorities do not dissipate at the expense of the ratepayers and the taxpayers the stock of houses which has been built up by them with such trouble and expense over so long a period and which are required to accommodate persons genuinely in need of housing. If local authorities do sell under the present terms, the terms I have approved under the Housing Act, 1966, then the sale price will make a fair and reasonable contribution towards the cost of building another house to replace that which has been lost from their stock. I think this is a sound principle and I am quite satisfied that the public generally will agree that the terms are fair to all the different people concerned in the sale of a house, the person purchasing the house and the people who have contributed to its construction and maintenance, the ratepayers and taxpayers.
With regard to assistance for private housing, the Opposition have again in this debate endeavoured to make it appear that little or nothing is being done and here again the facts are completely contrary to what has been alleged. The fact is that all local authorities are at present accepting loan and grant applications for new houses and a record sum of at least £7.5 million will be spent by local authorities for this purpose in the financial year 1967-68 compared with an actual payment of £4.62 million in 1964-65 and £6.75 million in 1966-67. In addition to that, all building societies are at present accepting loan applications.
Deputies have referred to the fact that the basic grant of £275 had not, they said, been increased since 1948. At the same time they complain that those grants were made irrespective of income or in other words, as Deputy Treacy says, without an odious means test. Presumably a means test in respect to the payment of housing grants would be an unodious test. Since the State grant was fixed at £275 this grant has been doubled for persons in need of housing by the provision enabling local authorities to pay supplementary grants. Most authorities do in fact pay those grants. In addition to that doubling of the grant for those people whose means indicate they require more assistance towards purchasing a house for themselves, the grant scheme has been extended in a number of other ways such as the provision of higher grants for serviced houses in areas without piped water supply and sewerage, special grants of up to £300 for elderly persons' accommodation, special grants of up to £450 for small farmers and others in rural areas. Of course there are supplementary grants available from local authorities also. The scheme has been extended by the introduction of essential repairs grants for older houses in rural areas, which are not capable of economic repair, but which can, by the carrying out of what we call essential repairs, be made reasonably habitable for a period of time which it appears will be likely to be as much as they will be needed for and in cases where the provision of a completely new house would appear to be unnecessary.
The scheme has been extended by the grant of up to 50 per cent of the cost for experimental or prototype houses. We have the introduction of dower house grants for farmers who surrender their own house to a member of the family or certain other persons, the introduction of grants for flats in buildings of three or more storeys, the introduction of a site subsidy of £150 payable to local authorities for each developed site sold for private building and the introduction of grants for major improvement work to local authority houses. There have been many other modifications and improvements in regard to the provision of assistance for people providing their own accommodation.
I think then it can be shown, contrary to what the Opposition have been alleging, that there has been considerable improvement with regard to grants for the building and improving of private houses since the present amount of the State grant of £275 was fixed. As those improvements have been mainly oriented towards those who were least well able to meet the costs of providing their own house, they are, of course, of no interest to the Opposition Parties. The value of the assistance for which a person building a house may qualify under those and associated aids would be up to £1,080 in a rural area and up to £990 in an urban area.