Jack Wall (Kildare South, Labour)
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Question 451: To ask the Minister for the Environment, Community and Local Government his plans to address the anomalies in the shared ownership loans as presented by local authorities (details supplied); and if he will make a statement on the matter. [21866/11]

Ciara Conway (Waterford, Labour)
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Question 474: To ask the Minister for the Environment, Community and Local Government if his attention has been drawn to a situation being faced by existing participants in the shared ownership scheme whereby the local authority's share of the property and the freehold remains and always will remain at purchase price while the owner's share in the property may have plummeted; his views on mechanisms to ensure that local authorities will incur a drop in the value of its share corresponding with overall drop in the total value of the property; the implications for participants in this scheme who are trying to sell their homes if local authorities do not incur such a drop on their stake in the property; the way this situation will be addressed in the interests of fairness for all parties; and if he will make a statement on the matter. [22242/11]

Willie Penrose (Longford-Westmeath, Labour)
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I propose to take Questions Nos. 451 and 474 together.

A person occupying a house under the shared ownership scheme has the right to buy out the local authority's share and acquire full ownership at any time. Alternatively, this may be done by purchasing, from time to time, additional shares of the authority's equity. For Shared Ownership transactions commenced from 1 January 2003, the cost of purchasing an additional share or the redemption value of the outstanding share 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 variable interest rates. The rent payments under the Shared Ownership Scheme are intended largely to meet the cost of funding provided by the Housing Finance Agency to local authorities to finance the rented share in the equity of the house. 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.

Accordingly, the scheme is structured on the basis 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.

While this may seem unfair to those living in shared ownership properties in the current market, it is important to note that the purchasers were in the position of having their share of the property rise in value when the market was rising.

Mortgage interest supplement under the Supplementary Welfare Scheme, administered by the Department of Social Protection, is payable, subject to the qualifying conditions of that scheme, in respect of mortgages under shared ownership transactions, in the same way as in the case of mortgages generally. An annual subsidy towards rent payments under the Shared Ownership Scheme is available through the Rental Subsidy Scheme, to households with a gross household income of up to €28,000 per annum in the preceding tax year. The level of subsidy ranges between €2,550 for incomes up to €13,000 and €1,050 for incomes up to €28,000.

The Government's housing policy statement, published on 16 June, announced the standing down of all affordable housing schemes, including the shared ownership scheme, as part of the review of Part V of the Planning and Development Act 2000.