Bernard Durkan (Kildare North, Fine Gael)
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Question 185: To ask the Minister for the Environment, Community and Local Government when it is likely that local authorities in conjunction with the Housing Finance Agency can again assume the full role of a housing authority wherein provision is made by way of a direct house building programme or a loan scheme to fund house purchase for persons in a particular category in view of the inability of the current structure to deal with the issue; and if he will make a statement on the matter. [31447/12]

Jan O'Sullivan (Limerick City, Labour)
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The social housing capital budget has been reduced from €1.535 billion in 2008 to just over €333.7m for 2012, and the financial parameters within which we will be operating for the coming years rule out a return to large capital funded construction programmes. Nevertheless, the Government is committed to responding more quickly and on a larger scale to social housing support needs through a variety of mechanisms, including through increased provision of social housing. In spite of the challenging circumstances within which local authorities are forced to operate, a tentative projection of 4,000 to 4,500 housing units is anticipated for 2012.

Projected levels of activity in 2013 will be subject to the financial provision for housing, which will be determined in the context of the 2013 Estimates process. Delivery of social housing will be significantly facilitated through more flexible funding models such as the Rental Accommodation Scheme and leasing, but the Government is also committed to developing other funding mechanisms that will increase the supply of permanent new social housing. Such mechanisms will include options to purchase, build to lease and the sourcing of loan finance by approved housing bodies for construction and acquisition. There is also obvious potential, across a range of housing programmes, for the Government's objective of sourcing and providing suitable residential units for use as social housing to be aligned with the commercial objectives of the National Asset Management Agency (NAMA).

In terms of loan finance for first time buyers, there are already two types of house purchase loan available from local authorities: standard annuity loans targeted at lower income first time buyers and those under the Home Choice Loan scheme which are available to qualifying middle income first time buyers affected by the "credit crunch". The terms and conditions governing the operation, including eligibility terms, of annuity mortgages and the Home Choice Loan are set out under the Housing (Local Authority Loans) Regulations 2009 and the Housing (Home Choice Loan) Regulations 2009 respectively. These are available on my Department's website: www.environ.ie.

There has been a low rate of uptake which suggests that access to credit is just one of a number of reasons for the low level of transactions in the housing market at present and that wider economic sentiment has a more significant impact on sentiment in the housing market.

It is not the intention of this scheme – or of any other Government intervention in the housing sector – to incentivise or entice people into the market. It is not intended therefore that the Home Choice loan would be modified to offer any such inducement or offer. It is designed only to facilitate credit worthy households who have been affected by conditions in the mortgage market.

As such, the scheme is a temporary one which will be withdrawn once conditions in credit markets return to normal patterns. Recent data published by the Central Bank would indicate that that point has not yet been reached.