Jan O'Sullivan (Limerick City, Labour)
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198. To ask the Minister for Housing, Planning, and Local Government if a local authority that is within a rent pressure zone is entitled to increase the rates for the rented portion of a home that has been purchased under the shared ownership scheme at an amount that is above the 4% per year limit for RPZs; if he will request local authorities to limit increases to 4% or less; and if he will make a statement on the matter. [43159/17]

Eoghan Murphy (Dublin Bay South, Fine Gael)
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The Planning and Development (Housing) and Residential Tenancies Act 2016 amends the Residential Tenancies Act 2004 to provide for the introduction of Rent Pressure Zones. The 2004 Act applies to every dwelling that is the subject of a tenancy, subject to a limited number of exceptions.  The dwellings to which the Act does not apply are set out in section 3(2) of the Act and include dwellings occupied under a shared ownership lease.

Under the Shared Ownership (SO) scheme which operated from 1991 to 2010, a borrower purchased at least 40% of the cost of their home by means of a local authority mortgage loan and then pays rent to the local authority on the remaining equity in the shared ownership house.  Shared ownership arrangements are not subject to the Residential Tenancies Acts 2004-2016.

My Department, together with the Housing Agency, the Housing Finance Agency and local authorities, has considered the affordability issues facing some borrowers who purchased properties under the SO schemes and devised a more affordable long-term path towards full home ownership.  A range of measures have already been taken to reduce the monthly repayments of these borrowers.  In addition, a new restructuring option has been available to SO borrowers since April 2016, which involves rolling up all outstanding debt into a single annuity loan.

The feasibility of this new option for each SO borrower will be determined by their local authority, and may not be appropriate in all cases.  For example, in some instances, continuing with the current SO arrangement may be the best option for both the SO borrower and the local authority, or in other cases where the outstanding debt may not be sustainable for the borrower in the long-term, the Local Authority Mortgage to Rent (LAMTR) option might ultimately be the appropriate solution.  There is no obligation on any SO borrower to restructure their loan arrangement.

Local authorities, in implementing the restructuring option, are directing SO borrowers to seek financial and legal advice, prior to accepting any offer of a restructuring option.  SO borrowers will be advised by their local authority, in the first instance, to contact the Money Advice and Budgeting Service (MABS) to seek free financial and legal advice.  The new Abhaile Service, accessed via MABS, can also assist SO borrowers who are in arrears to access free independent expert financial and legal advice. Full details of the supports offered by the Abhaile Service are available fromwww.keepingyourhome.ie.  Under the restructuring option, local authorities will arrange where SO borrowers require financial and legal advice outside of that provided via MABS, to pay the cost of these fees to a maximum of €1,000 excluding VAT.