Dáil Éireann díospóireacht -
Wednesday, 3 Mar 1999

Vol. 501 No. 4

Written Answers. - House Prices.

Brendan Howlin

Ceist:

58 Mr. Howlin asked the Minister for the Environment and Local Government if his attention has been drawn to the claim made in a report (details supplied) that couples earning less than £20,000 per annum cannot buy a home; the steps, if any, he will take to assist families in this category to secure a home; and if he will make a statement on the matter. [6167/99]

Minister of State at the Department of the Environment and Local Government (Mr. Molloy)

House price increases over the last two years have created an affordability gap for many aspiring house purchasers. To assist in bridging this gap, I announced yesterday a new affordable housing scheme which will be available to those households who satisfy an income test – up to £20,000 in the case of a single-income household, or those who surrender their local authority or voluntary accommodation. New houses at cost price will be provided by local authorities on land available to them. Mortgage finance at 4 per cent variable or 4.4 per cent fixed will be made available to the purchasers of housing supplied under the scheme. A subsidy payment will assist with mortgage repayments of purchasers with household incomes of up to £16,000. In effect, the scheme will make house purchase affordable for households with incomes appreciably below £20,000.

Crucial to consideration of any proposals to improve housing affordability is the need to avoid measures which would increase demand without a corresponding increase in housing supply as any such measures would only further fuel house price inflation. The affordable housing scheme which I launched yesterday fulfils this demand as it meets both sides of the demand/supply equation.

In addition, as part of the package of measures in the Government's Action on House Prices, the income eligibility limits for the shared ownership scheme were increased last year from £15,000 to £20,000 for single-income households with a corresponding increase for two-income households. Over 800 households availed of the shared ownership scheme in 1998 and there are also indications that applications under the scheme, which had been declining prior to the increase in income limits, have picked up significantly. Shared ownership remains an option available to households with incomes of less than £20,000 who wish to purchase their own home.

Data received by my Department from the lending agencies also indicates that a significant proportion of home purchasers in 1998 had incomes of less than £20,000.