John Lyons (Dublin North West, Labour) | Oireachtas source

The Government is currently examining a number of measures in preparation for its social housing strategy and wider housing policy. Securing a deposit for a house is challenging for young families, in particular, given the fall in incomes and the inability to save money.

One innovative response has been the rent-to-buy scheme which can effectively allow a tenant to convert a portion or a proportion of rent paid into a deposit to buy at the end of a defined period. A three-year pilot scheme was launched by Dublin City Council in 2010 and interest was strong at the time. This model should be examined as part of a future housing and social housing policy.

One of the key points of the rent-to-buy scheme is that obligations on both the tenant and the seller are adhered to and that timetables are met. However, I know of a case in my constituency where, unfortunately, a proportion of the Dublin City Council rent-to-buy tenancy agreements have not been met. This problem must be dealt with because the scheme is a good scheme.

Approximately 64 tenants in my constituency are part of the rent-to-buy scheme. This scheme is available to people on the council's affordable housing list and is aimed in general at low to middle income families who do not fit the social housing criteria. Properties were viewed in September 2010 and tenancies commenced in the period from November 2010 until April 2011. The original terms of the scheme state that people who availed of the scheme were supposed to rent their property at an affordable rent, at 80% of the estimated market rent for three years. At the commencement of the contract the council set the terms for the future sale of the property. Eighty per cent of the rent paid by tenants over three years was to be deducted from the sale price of the property as agreed between the tenant and the council at the time. However, there had been a change to the scheme in September 2013 whereby Dublin City Council, without any consultation with the tenants who signed up to the rent-to-buy scheme, informed them of two changes decided by the council. They were informed that the properties would not be offered for sale at the market value agreed at the beginning of the rent-to-buy scheme and that there would be no deduction for rent paid over the term of the three years. The council had broken two significant terms of the agreement with the tenants.

While the lack of consultation was regrettable, it is accepted that the motivation of the council was to realign the scheme with falling apartment prices.

From the outset, the scheme should have been proofed against market fluctuations, perhaps in a way similar to that adopted by NAMA in the context of deferred payment schemes.

At no stage during the re-evaluation process carried out in 2013 and 2014 or when the three year tenancies were coming to an end were tenants informed of any delay relating to the scheme. Everyone operated on the basis that when the three year tenancies ended, the properties involved would be offered for sale and that those tenants who did not want to proceed to purchase would surrender their properties. As a result, people put mortgage arrangements in place, saved money for deposits and incurred the usual expenses relating to buying a home. It is seven to nine months since their tenancies ended, but the city council has not offered any property for sale. I understand the council is prepared to extend rental contracts to the end of this year and then review whether the technical issues holding up the sale of the properties have been resolved.

As matters stand, the 61 residents of Prospect Hill, Finglas, to whom I refer are in limbo. They do not know whether the agreements to which they signed up under the rent-to-buy scheme will be honoured or whether the money they paid in over three years and expected to be deducted from the eventual sale price agreed at the outset will be offered back to them. They also do not know whether the additional rent they have paid beyond the term of the three year scheme will be taken into account in any future deal.

The rent-to-buy scheme is a good one, but there are a couple of problems relating to it which need to be solved. I ask that the Minister for the Environment, Community and Local Government contact Dublin City Council in order to discover how effective the scheme is and in the interests of addressing the issues of concern to the people of Prospect Hill in Finglas.

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