Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Question 346: To ask the Minister for the Environment, Community and Local Government the position regarding repossession of properties acquired with local authority loans; the numbers of repossessions on a county basis to date in 2011; if he will provide copies of any circulars, letters or advice provided to local authorities in relation to the repossession of homes; if he has directed that persons with shared ownership arrears should be prioritised for eviction; and if he will make a statement on the matter. [36927/11]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Local authorities have long led the way in dealing proactively and sympathetically with mortgage arrears. They can, and do, exercise the powers available to them and endeavour, in all arrears cases, to engage proactively and constructively with a distressed borrower with the aim of enabling a household remain in their home. The available data strongly bear this out and suggest that repossession, where it occurs, is always a last resort.

Local authority borrowers have received considerable protection from the worst effects of the downturn in terms of their borrowing costs. The effective rate for borrowers has come down by over 2% since end November 2008, standing now at just 3.25% and falling further to 3% as of 1 December. These rates represent exceptional value by comparison to rates charged by commercial lenders; as of now, the local authority rate is more than 1% lower than the average market variable rate. Provisions regarding lending by local authorities for the purposes of house purchase are set out in section 11 of the Housing (Miscellaneous Provisions) Act 1992. Where a loan stands in default section 11(10), and, more recently, section 34 of the Housing (Miscellaneous Provisions) Act 2009 provide that a local authority may make such monetary arrangements with a borrower as the authority considers equitable to take account of the particular circumstances of the borrower.

In addition, and to support consistency of approach and ensure best practice across all local authority areas, my Department issued guidance in 2010, based on the Regulator's Code of Conduct on Mortgage Arrears. I am arranging to have a copy of this guidance circulated with the official record. Also, to reflect the content of the Central Bank's revised Code of Conduct – which replaced the previous code from 1 January 2011 and was informed by the deliberations of the Expert Group on Mortgage Arrears and Personal Debt – my Department is currently preparing updated guidance to local authorities in consultation with the City and County Managers Association.

The single most important advice for any borrower facing difficulties in meeting repayments – whether their mortgage is with a local authority or private institution – is to engage early, proactively and constructively with their lender to seek to achieve an agreed solution.

To date in 2011, as indicated in the table below, there have been 80 repossessions by local authorities. 40 of these were by means of voluntary surrender and 40 by means of court order.