Tuesday, 23 October 2012
Dáil Éireann Debate
When I was a member of a local authority there was a great deal of co-ordination. We used to have a lot of meetings between Waterford and Kilkenny. A predecessor of the current Waterford city manager decided to stop such meetings. Perhaps we should resume the process in order to have a better relationship. Waterford could start to have a better relationship with Kilkenny; I would welcome that.
An Leas-Cheann Comhairle: The time for Priority Questions has expired. We will take Question No. 52 in ordinary time.
52. Deputy Bernard J. Durkan asked the Minister for the Environment, Community and Local Government the extent to which he continues to receive information from the various local authorities in respect of arrears of shared ownership or annuity loans; if as a result he will initiate legislation to address the on-going situation whereby borrowers are expected to meet repayments in respect of the rental equity which are greater than that applicable to the mortgage equity; and if he will make a statement on the matter. [46187/12]
Minister of State at the Department of the Environment, Community and Local Government (Deputy Jan O'Sullivan): My Department has recently commenced the collation of data from local authorities on the number of loans in arrears broken down by the length of time in arrears. The data from the second quarter of 2012 indicate that 6,280, or 28% of all local authority mortgages, including those drawn down for the purpose of purchasing houses under the various affordable housing schemes such as shared ownership and tenant purchase, are in arrears of more than 90 days.
An Leas-Cheann Comhairle: I call Deputy Durkan. For a moment I could not find him in the Chamber.
Deputy Bernard J. Durkan: I know I am nearly invisible.
I thank the Minister of State for her reply. However, there is an issue that needs to be dealt with, and I ask her to clarify whether it has been dealt with by the expert group. I refer to the fact that the rental part of loan repayments has increased way beyond what was anticipated. The situation is no longer as was envisaged and indicated to purchasers in the first place. For example, purchasers were told initially that the rental part of the equity would remain at a certain level. The condition was that within a 25-year period an agreement had to be entered into to purchase the second part of the equity. That has changed; purchasers are now told they must purchase the second part of the equity within a 25-year period. Was any account taken of that by the expert group with a view to pulling the repayments into line with ordinary mortgage repayments in the private sector?
Deputy Jan O'Sullivan: I am conscious of the difficulties faced by distressed home owners, particularly, as Deputy Durkan has said, those involved in the shared ownership scheme. The Deputy spoke of the rental part of the agreement being different to what was originally understood. Many Deputies have brought this issue, and the difficulties people are having, to my attention. We will examine the matter to see what can be done. The difficulty is that local authorities borrowed the money initially through the Housing Finance Agency and we do not wish to impoverish them, but at the same time we wish to deal sympathetically with the difficulties those who have taken out loans are experiencing.
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