Jack Wall (Kildare South, Labour)
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Question 466: To ask the Minister for the Environment, Heritage and Local Government his views on correspondence (details supplied) and on whether the position adopted in this case will have an adverse effect on one off housing in rural areas and the right for a person to build a house in their own locality; his plans to address such a situation; and if he will make a statement on the matter. [4657/09]

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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Given that sentiment in the housing market is heavily dependent on wider sentiment in the economy, the Government's approach is focused on the broader economic fundamentals and on ensuring, ultimately, that the housing market is underpinned by these. While the Government has been careful to ensure that the process of correction in the housing market is not artificially interfered with, a number of steps have been taken to ensure that in so far as possible mortgage finance is available to households who want to buy or build houses at this time.

In this regard the Government announced the introduction of a new mortgage scheme in the context of Budget 2009. The Home Choice Loan has been introduced through the local authority system, backed by loan finance raised by the Housing Finance Agency. Home Choice Loan is now available to first time buyers of new houses or self-builds, subject to a maximum loan of €285,000 or max LTV of 92% (whichever is the lesser) and income thresholds. The Regulations to underpin the scheme were signed in December and the scheme commenced on 1 January 2009.

In addition, the Government's plan to recapitalise Allied Irish Bank and Bank of Ireland includes a Credit Package under which the banks are committed to, amongst other things, providing an additional 30% capacity for lending to first time buyers in 2009. The banks have committed to actively promote mortgage lending at competitive rates with increased transparency on the criteria to be met.

A statutory code of conduct on mortgage arrears which will apply to all banks is expected to be published shortly.

To provide further support, the Government also increased the rate of mortgage interest relief for first time buyers in Budget 2009 from 20% to 25% in year 1 and 2 of their mortgage and to 22.5% in years 3 to 5. It will remain at 20% in years 6 and 7. This measure follows on from the significant improvements made in Budget 2007 & 2008. The ceiling for mortgage interest relief for first-time buyers was doubled in Budget 2007 from €4,000 single/€8,000 married to €8,000 single/€16,000 married. The ceiling for first-time buyers was further increased in Budget 2008 to €10,000 single/€20,000 married. Moreover, the majority of lending institutions have also now passed on in full the cumulative interest rate decreases of 2.25% announced by the European Central Bank since October 2008.