Under the affordable housing scheme, launched in March 1999, a mortgage subsidy is payable to qualifying households based on income bands. A similar subsidy applies under the shared ownership scheme towards the rent payments for that portion of the equity not yet purchased. A total of €2,038,876 was recouped by the Department to local authorities in respect of these subsidies in 2003, for claims relating to 1,630 people. There is also a mortgage allowance available to those vacating local authority dwellings but this is not based on incomes.
The number of persons who purchased houses under the shared ownership and affordable housing schemes between 2000 and June 2004 was 9,085. Of these, 5,916 transactions were completed under the shared ownership scheme and 3,169 homes were purchased under the affordable housing scheme. Figures for the proportion of those who receive a subsidy as a percentage of those benefiting under the schemes are not available as some recipients may have bought out their shared ownership house and others may have moved outside of the income brackets.
The qualifying income limits and the amounts of the rent and mortgage subsidies under the shared ownership and affordable housing schemes, respectively, were increased four years ago for all transactions completed on or after 15 June 2000. They are set as follows.
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Household Income per annum
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Mortgage/Rent Subsidy payable per annum
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€13,000 and under
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€2,550
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€13,001 to €15,500
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€2,300
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€15,501 to €18,000
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€2,050
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€18,001 to €20,500
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€1,800
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€20,501 to €23,000
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€1,550
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€23,001 to €25,500
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€1,300
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Over €25,500
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Nil
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If the income limits were increased in line with the growth in the average industrial wage or the consumer price index since 2000, the maximum qualifying income would have risen from €25,500 to about €30,500 or €28,900, respectively. A rise in the subsidy levels in line with the CPI would cost about €275,000 per annum, but increasing the income limits would increase this substantially as additional people would qualify. Any consideration of improvements to the scheme would have to take account of the most effective use of resources to improve access to housing for low income families; it was against this background that the scheme was initially introduced.
Since 2000, there have been significant improvements to the shared ownership scheme and the access to affordable housing has been significantly enhanced through increased output under the 1999 scheme and this will grow in future years as additional units come through under Part V of the Planning and Development Acts 2000-2002 and the affordable housing initiative.
I also announced increases in the income limits for the shared ownership and affordable housing schemes and house purchase loans in July of this year, together with increases in the loan limits, in line with growth in average wage costs and house price inflation. These targeted measures are important mechanisms of providing access to affordable housing by low and modest income households by providing them with a house at a discounted price. With the increased availability of such housing, the funding of a loan becomes a less critical barrier to house purchase particularly with the growth in disposable incomes and historically low income rates.
Nonetheless, the terms and conditions of these schemes will continue to be kept under review and, in particular, the housing forum has been charged under Sustaining Progress to review the effectiveness of all social and affordable housing programmes.
