Phil Hogan (Carlow-Kilkenny, Fine Gael)

I thank the Deputy for raising this matter. The most recent tenant purchase scheme, introduced in the last budget, is an enhancement of the existing scheme. It provides for a discount of up to 45% for qualifying tenants. Given that the discount is applied to the open market value of the property, and that house prices have fallen considerably in recent years, the scheme is both generous and attractive for prospective purchasers.

My Department is anxious to facilitate home ownership under this and other schemes for as many local authority tenants as possible. In order to advance such acquisitions, local authorities have been making loan finance available for a good many years. A considerable number of people have benefited from access to funding from this source when no other options were open to them. My Department and the local authorities will continue to explore more imaginative modes of housing delivery in the coming years. In advancing loans for housing acquisition, it is of pressing importance that the funding be made available based upon sound lending criteria. We owe it to our borrowers to ensure that loans are granted fairly and transparently. We also have a responsibility to ensure that the borrower can sustain the loan and keep intact the realisation of the goal of home ownership to which he has aspired.

Of equal importance, in view of recent developments in the domestic property market, is the imperative for local authorities to ensure that prudence and pragmatism are applied to all aspects of the management of their housing loans books. In a time of limited resources, deploying those resources in a focused and effective manner ensures the management of the loans portfolio can be achieved as efficiently as possible.

The current credit policy has been in effect since 2009. It was deemed appropriate at that time to update the elements associated with local authority lending and to have a homogenous regime in place that ensured best practice was followed across the sector. My Department constantly monitors these trends and reacts accordingly. A revised set of guidelines, which are in preparation and which will issue shortly, will voluntarily incorporate recent changes made to the Financial Regulator's code of practice. Under this protocol, all applicants are assessed according to the same criteria, and their applications subjected to the same independent scrutiny. It is desirable to make adequate lending provision available to local authority tenants who wish to avail of the tenant purchase schemes, while also adhering to prudent lending practices. The current and impending revised guidelines achieve equitable consideration of all applications.

I am happy that the current regime is a fair scheme that adequately meets the needs of prospective borrowers and facilitates participation in housing acquisition initiatives such as the existing and revised tenant purchase schemes.

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