Dáil Éireann Debate, Thursday - 27 September 2012
118. Deputy Dessie Ellis asked the Minister for the Environment; Community and Local Government the measures he will implement to help those who are in negative equity on shared ownership mortgages for properties which are no longer suitable to their family needs (details supplied). [41055/12]
Amharc ar fhreagra119. Deputy Dessie Ellis asked the Minister for the Environment; Community and Local Government his plans to help those who because of the low level of repayment and increasing rent levels want to buy out their shared ownership mortgage to get credit either from local authorities or other bodies or funds. [41056/12]
Amharc ar fhreagraI propose to take Questions Nos. 118 and 119 together.
Under the Shared Ownership scheme the rent charged on the local authority’s equity in a shared ownership transaction is to cover the funding costs to the Housing Finance Agency which are based on borrowings at the prevailing interest rates. Any difference between the rent and prevailing interest rate is reflected in the capital outstanding on the property, i.e. if the rent charged in any period is greater than the prevailing mortgage interest due on the local authority’s share the purchase price of the outstanding equity will be reduced accordingly. Local authority mortgage holders – including those who purchased under shared ownership – also benefit from extremely keenly priced interest rates which currently stand at around 1.5% below average variable rates available in the market. This is a very substantial differential.
To take account of the current housing market conditions, the Government's housing policy statement, published in June 2011, announced the standing down of all affordable housing schemes, including the shared ownership scheme, in the context of a full review of Part V of the Planning and Development Act 2000. That review is now underway and it is expected to conclude later in the year. Any future changes to legislation governing affordable housing schemes, including shared ownership, will be informed by that review.
