Billy Timmins (Wicklow, Fine Gael)
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Question 807: To ask the Minister for the Environment, Heritage and Local Government if his attention has been drawn to a difficulty being experienced by purchasers of affordable housing under section 9 or 10 of the Housing (Miscellaneous Provisions) Act 2002 who wish to change their mortgage from the local authority to a financial institution, as the claw-back concept is attached to the mortgage and not the property; if he has received representations on the issue; and if he will make a statement on the matter. [29263/05]

Noel Ahern (Dublin North West, Fianna Fail)
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Houses sold under the various affordable housing schemes at a discount from market value contain a claw-back provision which is necessary to ensure that there is no short term profiteering on the resale of a house. In the traditional circumstances where local authorities were the sole supplier of mortgage finance for affordable housing, authorities registered the claw-back as a charge on the mortgage deed or, in the case of shared ownership transactions, inserted it as a clause or condition in the lease. This allowed them, as the lender, readily to enforce the claw-back. Two of the main financial institutions are now introducing schemes of mortgage financing for persons who wish to access affordable housing.

Following extensive discussions with my Department, agreement was reached with these institutions on the rankings of the various charges, which included provision for a claw-back as a charge on the property, in the context of implementing the new mortgage products. Discussions are under way with several other leading private lenders with a view to initiating similar products. Since the introduction of these mortgage products, I have received representations regarding the difficulties being encountered by persons wishing to re-mortgage with the private lenders. It is reasonable for a local authority to allow re-mortgage through a private lender provided the claw-back provision is fully protected; and it would be a matter for the local authority in such cases to ensure that the claw-back can be imposed as provided for in legislation. However, with a view to achieving a widely agreed solution for this kind of case, my Department is in communication with the private lenders about standardising arrangements. I hope that these would be finalised urgently and put in place as soon as possible.