Catherine Murphy (Kildare North, Independent)
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To ask the Minister for Environment, Community and Local Government the guidance, if any, he has given to local authorities in relation to calculating repayments on shared ownership loans; the reason it is calculated based on the previous years income with no practical provision for income drops in the current year; his plans to review this practice; and if he will make a statement on the matter. [45536/12]

Jan O'Sullivan (Limerick City, Labour)
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The general terms and conditions governing the Shared Ownership Scheme have been notified to local authorities by means of circulars. Circular HMS 05/2003, as updated by Circular HMS 06 and 06A/2003, outlined the operation of the Scheme, including details in respect of repayment calculation on the mortgage and rental elements of such loans.

Under the 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.