asked the Minister for Local Government the gross price and the percentage increase in the cost of new houses for which loans were approved by all agencies in June 1973 and in January 1975.
Ceisteanna—Questions. Oral Answers. - New House Cost.
35.
Statistics of new house prices are compiled on a quarterly basis and the latest available figures are these for the quarter ended 31st December, 1974. The average gross prices of new houses in all areas for which loans were approved by the three principal lending agencies in the quarters ended 30th June, 1973 and 31st December, 1974, were £6,946 and £9,116, respectively. The percentage increase was 31.24 per cent.
In view of the enormous increase in the gross price of houses between the two dates mentioned, would the Minister not agree that the qualifying income limit and the limit for loans for private houses should be increased?
I am sure the Deputy will appreciate I have given the average price. This includes the very expensive houses that increased by far more than houses at the lower end of the scale. While I agree with the Deputy that there might be an argument for increasing the loan, the situation is that there are already many applications for loans at the existing rate and it would not be a good idea to increase them at the present time. It would mean bringing other people who are getting money elsewhere into the net for SDA loans.
While I appreciate the figure given by the Minister is an average one and that some very expensive houses may be included, the number of such houses is relatively small in relation to the total.
Possibly that is the case.
Would the Minister not agree that in many instances those people who apply for SDA loans find they have no alternative but to borrow elsewhere for the difference between the loan and the price of the house? The total monthly repayments are exceptionally high in such circumstances and that places a considerable burden on those who have no alternative but to apply for an SDA loan and another loan.
I was not quite sure what the Deputy was at when he referred to this the other night but now I understand him better. I would be interested to know where people like this are able to get a second mortgage on such a house. I do not think it is quite true. What is in fact happening is that people have to save more in an effort to try to build a house of their own. If what Deputy Faulkner is suggesting was done—increase the amount of income for the purpose of qualifying and the amount of the loan—it would bring a lot of people into the application group. These people are at present outside it and getting their money elsewhere. At present there are no plans to do it and, therefore, there is no point in saying there are.
The Minister spoke of those who are outside the qualifying limit and who would be brought within the qualifying limit if it was raised, but the Minister will equally agree that during the period from June, 1973 to January, 1975, due to increases in income, many people who were eligible in June, 1973 are no longer eligible although the increase in income made no difference to their standard of living.
The number of young people who are applying for such loans at the present rate is tremendous and, therefore, they must be of use to them; they must be able to build and buy their houses with them. I do not see any reason for an increase at this stage.
Is the Minister aware that the type of people who are continuing to build are those in more or less the higher income group and that people in the lower income group are not able to make any use of the SDA loans? Those who were able to build or buy a house with those loans previously cannot do so any more because the amount of the loan is too small, unless, of course, they saved very hard. The result is that more people are falling back on the local authority to be housed.
This does not apply to the higher income group; it applies to people with an income in the region of £46 per week. What I find amazing is that the price of houses being built in Galway is far higher than anywhere else in the country.
Would the Minister consider this question again?
At present there is no proposal to make a change.