Written answers

Tuesday, 2 October 2012

Department of Environment, Community and Local Government

Local Authority Housing Rents

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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To ask the Minister for Environment, Community and Local Government his plans to change the terms of the shared ownership option schemes, in view of the fact that persons are now paying very high rent on the rental part of their property and also have large repayments on the purchase part of these properties that are only a fraction of the value they were at the time of purchase; and if he will make a statement on the matter. [41240/12]

Photo of Jan O'SullivanJan O'Sullivan (Limerick City, Labour)
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Under the Shared Ownership scheme the rent charged on the local authority’s equity in a shared ownership transaction is to cover the funding costs to the Housing Finance Agency which are based on borrowings at the prevailing interest rates. Any difference between the rent and prevailing interest rate is reflected in the capital outstanding on the property, i.e. if the rent charged in any period is greater than the prevailing mortgage interest due on the local authority’s share the purchase price of the outstanding equity will be reduced accordingly.Local authority mortgage holders – including those who purchased under shared ownership – also benefit from extremely keenly priced interest rates which currently stand at around 1.5% below average variable rates available in the market. This is a very substantial differential.

To take account of the current housing market conditions, the Government's housing policy statement, published in June 2011, announced the standing down of all affordable housing schemes, including the shared ownership scheme, in the context of a full review of Part V of the Planning and Development Act 2000. That review is now underway and it is expected to conclude later in the year. Any future changes to legislation governing affordable housing schemes, including shared ownership, will be informed by that review.

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