asked the Minister for the Environment if he considers that the Housing Finance Agency are in a position to raise the finance they require; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Housing Finance Agency.
32.
Despite difficulties experienced in relation to one stock issue earlier this year, because of particular circumstances prevailing in the financial markets at the time, the Housing Finance Agency have to date succeeded in raising the finance they require to meet loan payments and I am confident that they will continue to do so.
Would the Minister indicate the source of the additional £7 million which was made available to the Housing Finance Agency recently?
This is short-term borrowing agreed with the Minister for Finance.
Will the extra £7 million be made available to county councils who have approved loans but are short of finance to pay them?
That was the purpose of raising the extra £7 million.
Could the Minister give details of the short-term loans which he mentioned?
This is a matter for the Housing Finance Agency.
I understood that the agency had failed to get funds on the open money market.
The agency failed earlier this year but were successful later on in raising £30 million of 2 per cent index-linked HFA stock No. 2,008.
Why is the Minister reluctant to give information as to where the £7 million came from?
I have explained to the Deputy that short-term borrowing has been approved by the Minister for Finance to allow the agency to raise that money.
From private sources?
Obviously from the banks.
Why has it been found necessary to reduce the amount which he allowed the agency to raise from £70 million last year to £65 million for 1985? Would the Minister outline how the Housing Finance Agency will continue to raise finance in view of the failure of the last bond issue to the financial institutions?
The allocation to the Housing Finance Agency for next year has been increased by £2 million over the sum which had been allowed for in the Estimates. Last year the amount fell short of the demand and, if the same problem arises again, it will be considered at the appropriate time.
Will the Minister answer the second part of my question?
The last loan issue was met. In October the agency succeeded in placing £30 million of 2 per cent index-linked HFA stock. The proceeds of this issue, £25.3 million, were raised. The Deputy is probably referring to the earlier issue in May last year which did not realise the amount required and certain short-term borrowing had to be taken up to make up for the shortfall. A number of issues caused problems at the time but that is not the case at present.
Does the Minister accept that this index-linked form of raising finance is not attractive to financial institutions? Does he accept that they are not interested in making finance available in this way and that the agency will continue to have serious difficulty in attracting funds? The Minister should consider changing the system whereby finance is raised by the Housing Finance Agency. Does the Minister further accept that the system operating at present is very costly and is passed on to the borrower? It could be a number of percentage points higher than the building society levels during periods of even reasonably high inflation.
I do not accept what the Deputy said, since in October the agency succeeded in raising £30 million of HFA stock. We will have to wait to see if the Deputy is correct. The Deputy has made other comments but I can only say to him with regard to the terms of the loan that the number of applications indicate it is a very successful method of providing housing finance for certain categories of people.
Will the Minister say what interest rates are being paid to banks on short-term borrowings?
I have not that information.
Will the Minister make it available?
Yes.