Richard Bruton (Dublin North Central, Fine Gael)
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Question 143: To ask the Minister for the Environment, Heritage and Local Government if the value of a council's equity in a house sold under shared ownership reduces in proportion to the fall in the market price of the house; if he will make arrangements whereby persons who are forced to sell their home would see an equitable share of the loss and value borne by the council; if he will indicate in the event of a forced sale the ranking in priority in access to the proceeds of the mortgage holder and of the local authority who has a share in the home; and if he will make a statement on the matter. [43432/10]

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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For purposes of the shared ownership scheme, the redemption value of the outstanding local authority share, for transactions commenced from 1 January 2003, is based on its initial cost adjusted annually to compensate for differences between the rent paid on the local authority's share and the interest calculated by reference to the prevailing interest rates. The scheme is structured so that, on redemption, the price of the outstanding share is not determined on the basis of a percentage of current market value, but is, rather, a function primarily of its initial capital cost. Accordingly, the issue of an authority accepting a loss due to the current economic climate may not arise.

The same calculation methodology is utilised in the event that the owner of a house purchased through shared ownership wishes to sell the house on the open market.

For transactions commenced before 1 January 2003, the cost of purchasing an additional share, or the redemption value of the outstanding share, is its initial cost updated in line with the most recently published Consumer Price Index to the time of purchase.

Any person occupying a dwelling under the shared ownership scheme can apply to the relevant local authority to have the loan repayment period extended and arrears capitalised, so as to make repayments more manageable. It is also open to a person to seek to return the dwelling to the ownership of the local authority.