Michael Finneran (Roscommon-South Leitrim, Fianna Fail)

More than 1,400 prospective purchasers have formally registered interest on the dedicated home choice loan website and, to date, 44 applications have been made. Of these applications, 27 have been declined and four approved, with two loans now drawn down. Three applications have been withdrawn, while a decision is pending on ten applications, on which further information has been sought from the applicant.

The scheme is operated by four local authorities acting on a regional basis with administrative support from a central processing unit in the affordable homes partnership. Total costs of approximately €280,000 have been incurred to date in establishing the scheme which have been met from within existing resources. The projected costs for the remainder of 2009 and 2010 are €10,000 and €20,000, respectively. A significant element of the total cost was incurred in the development of the loan processing model that applies to the home choice loan but which has also now been used in the development of revised systems for processing and credit checking of normal local authority house purchase loan applications under other schemes such as the affordable housing and shared ownership schemes. In addition, it is expected that ongoing administrative costs will be met from normal lending margins.

The scheme is targeted at creditworthy first-time buyers of new houses only. As I have indicated on a number of occasions since it was introduced, the focus on new houses was intended to reflect the fact that the significant majority of first-time buyers had tended to opt to purchase new houses. However, I have also stated consistently that the terms of the scheme will be kept under review and that particular attention will be paid to any changes in purchasing tendencies among first-time buyers generally. More recent data suggest the purchasing tendencies of first-time buyers have shifted significantly in recent months, with the majority now tending to purchase second-hand homes, possibly as a result of improved affordability on foot of price decreases and historically low interest rates. Therefore, I have instructed my Department to make arrangements allowing for the extension of the home choice scheme to include second-hand houses. I do not expect additional administrative costs to arise from the extension of the scheme.

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