Written answers

Thursday, 2 October 2008

Department of Environment, Heritage and Local Government

Social and Affordable Housing

5:00 pm

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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Question 247: To ask the Minister for the Environment, Heritage and Local Government the income thresholds which apply to qualify for shared ownership and to qualify for a subsidy towards the repayments; the year when the value of these was last increased; and if he has completed a review of the case for increasing their value. [33170/08]

Photo of Michael FinneranMichael Finneran (Roscommon-South Leitrim, Fianna Fail)
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The income eligibility and loan limits for the shared ownership scheme were reviewed and increased with effect from 1 January 2006. The income eligibility for a single income household increased to €40,000 while in the case of a two-income household, the income limit is based on the formula that 2.5 times the main income plus once the secondary income does not exceed €100,000. Where household income is below €28,000 in the previous tax year, a graded subsidy up to a maximum of €2,550 per annum is available to applicants on low incomes under the Shared Ownership Scheme. I am currently examining the qualifying limits for mortgage loans taken out with local authorities and will complete this process as soon as possible.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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Question 248: To ask the Minister for the Environment, Heritage and Local Government the rate of interest, the rate of charge for mortgage protection, the rental rate charged, the rate of subsidy towards repayments and the cost per month of these charges on a typical shared ownership purchase over 30 years on a €300,000 house. [33171/08]

Photo of Michael FinneranMichael Finneran (Roscommon-South Leitrim, Fianna Fail)
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The variable interest rate charged by a local authority on the mortgage element of a shared ownership transaction is determined by the Housing Finance Agency by reference to prevailing rates in the financial market. The current variable rate is 5.25%. In addition, a mortgage protection charge of 0.598% is applied to all local authority loans. Rent is calculated at 4.3% of the value of the share in the ownership held by the local authority. This amount is increased annually by 4.5%. The rent per €1,000 is, therefore, €3.58 per month initially, increasing annually by 4.5%. This amount excludes any rent subsidy due. Purchasers are required to buy out the full ownership within a 25-year period.

The income bands and the rate of subsidy payable under the Rental Subsidy scheme are set out in the Table:

Income BandSubsidy
13,000 and under2,550
13,010 – 15,5002,300
15,501 – 18,0002,050
18,001 – 20,5001,800
20,501 – 23,0001,550
23,001 – 25,5001,300
25,501 – 28,0001,050
Over 28,000Nil

The monthly cost of a shared ownership transaction depends on the price of the home, the percentage split of the overall price between the purchase and rental elements and the purchaser's eligibility for subsidy under the Rental Subsidy Scheme.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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Question 249: To ask the Minister for the Environment, Heritage and Local Government when the new equity loan will come into operation; and the income thresholds and terms and conditions which will apply. [33172/08]

Photo of Michael FinneranMichael Finneran (Roscommon-South Leitrim, Fianna Fail)
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The Affordable Homes Partnership were asked to consider how the range of existing affordable housing mechanisms might be enhanced. A resultant report Increasing Affordable Housing Supply has now been published. The report's recommendations are based on optimising the output from the existing mechanisms and include a proposal to introduce a new affordable housing product based on an equity loan arrangement to be used in conjunction with the existing schemes.

A consultation on the various aspects of the report, including the equity-based loan, was launched at the end of April 2008. In addition to the public consultation, my Department consulted with the social partners, housing practitioners and financial institutions. I am considering the outcome of this consultation process and appropriate measures in light of current market conditions.

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