Alan Kelly (Tipperary North, Labour)
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My Department, with the assistance of the Housing Agency, the Housing Finance Agency and the Local Authority Housing Loans Management Group, has been examining the operation of the Shared Ownership Schemes for existing borrowers. The issues arising with Shared Ownership Schemes require careful consideration and expert financial data analysis. Arising from the findings of the examination to date, the Index Linked Shared Ownership Scheme which operated from 1999 until 2002 has been revised with regard to the annual indexation of the rental equity balance and rental payments.

The amendments, which came into effect on 1 July 2015, reduce the monthly cost for these borrowers and avoid existing rental equity balances increasing for the remaining term. My Department has issued directions to local authorities outlining the measures and I understand that these changes are being applied to individual loan accounts.

In addition, the most recent reduction of 0.20% in the Local Authority variable mortgage interest rate will also benefit many Share Ownership borrowers. This rate cut brought the variable mortgage interest rate charged to local authority borrowers down to 2.55% with effect from 1 July, saving borrowers around €17 per month on a typical mortgage of €100,000.

My Department, together with the other agencies, is continuing to examine the operation of Shared Ownership loans and issues arising for some borrowers, with a view to exploring further measures that may assist with the affordability of these arrangements.