asked the Minister for the Environment if he is fully satisfied with the manner of operation of the certificate of reasonable value; and if he is aware of any dissatisfaction with regard to the present system.
12.
Ceisteanna—Questions. Oral Answers. - Certificate of Reasonable Value.
11.
asked the Minister for the Environment if he is satisfied with the current administration by his Department of the system of certificate of reasonable value for newly constructed houses; if he has received representations from various professional and constructional bodies indicating their direct dissatisfaction with the current administration; and if so, if he will make a statement on the matter.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 11 and 12 together.
I am satisfied that the certificate of reasonable value system is operated in a fair and equitable manner and that a reasonable balance is maintained between the interests of builders and house purchasers. I am aware that, from time to time, certain aspects of the system have been the subject of criticism from various quarters—some of which suggest that the controls are not strict enough and are being evaded while others allege that they are too strict. I am reviewing the system in the context of the Housing (Miscellaneous Provisions) Bill, 1977, and will consider including provisions in the matter.
Might I ask the Minister if he has seen in the Quarterly Economic Review of the ESRI the suggestion that the administration of the certificate of reasonable value system is causing a number of builders to build in what is described as the luxury market and who are not, therefore, providing housing in the area for which the Government have earmarked a percentage of building societies' resources? Has the Minister seen that reference?
I have not seen it but I assume that what the Deputy says is correct. As far as I am aware the position is that builders are reasonably satisfied with the system. It has been and is working reasonably well. So far this year the system has resulted in a saving of approximately £750,000 to house purchasers. I am satisfied with the way it is being operated. As I indicated in my reply, I am reviewing the system in the context of the Housing (Miscellaneous Provisions) Bill, 1977, which will be circulated during the Christmas recess, or immediately afterwards, when the House will have an opportunity of discussing this whole issue during the debate on that Bill.
In view of the fact that the Minister has not seen what is perhaps an extraordinarily relevant article for somebody with his direct responsibilities, could he state whether, in his personal view, as Minister directly involved, the certificate of reasonable value system, with all its attendant difficulties—in the view of this administration—has caused a number of private enterprise builders to build in the luxury market in order to avoid administration under the CRV system?
That is not so, particularly since the Government action of August this year when they decided that building society loans should be apportioned on the following basis: at least 60 per cent of the total value of funds available for mortgages should be allocated in providing mortgages for house purchasers whose mortgage requirements did not exceed £13,000; that at least a further 20 per cent of the funds should be allocated in providing mortgages for house purchasers whose mortgage requirements were in excess of £13,000 and not exceeding £16,000 and—very important—that a certificate of reasonable value be furnished by all applicants for mortgages not exceeding £16,000 for the purchase of new houses.
In view of the recent Central Bank Report which indicated clearly that house prices had gone up in the order of 23 per cent to 25 per cent over house-building costs, does the Minister consider that the time to review the usefulness of the CRV itself is at hand in so far as it is of any value to would-be house purchasers at all? Secondly, is the Minister aware of allegations that a small minority of builders have abused the CRV system by obtaining a CRV and subsequently inflating the cost of the house by adding very large sums for such alleged extras as central heating, fitted wardrobes and that type of thing? Is the Minister aware that this allegation has been made and that names have been mentioned in certain contexts about the allegation? Further, if the Minister is aware of this what is he going to do about it?
I am not aware——
Well then I will make the Minister aware of it. Would the Minister be good enough to take it up? Might I have a comment on the first part of my question?
The CRV system is being reviewed in the Department. We will have an opportunity of discussing the whole system when the Bill is debated early in the next Dáil session.
When will this review be finalised?
I would say immediately after the Christmas recess.
That would be January. Therefore, by January, the Minister will be able to tell us what he is going to do with the CRV system?
When the Bill is published.
Is the Minister saying that at the end of January—to be reasonable about it—he will be in a position to announce any proposed changes in the certificate of reasonable value system?
If any, following review. We will have an opportunity of debating the whole matter during the discussion on the Bill in the House early in the next Dáil session.
What is the point of reviewing it unless the Minister considers some changes are likely?
Deputy, please.
Presumably the Minister reviews something because he is dissatisfied in respect of some area. Therefore, is it not more likely that there will be some changes rather than none?
We are getting into the realm of argument. I am calling Question No. 13.