Allocation of €50m to provide for 5,500 houses

Social HousingAn additional €50 million allocated for social housing in the Budget will provide for 5,500 new houses in 2005 - about 500 more than was envisaged in the Estimates, the Minister for the Environment, Mr Roche, has said.

The Minister said the total capital spending available to local authorities would be €1.3 billion - a record amount - in 2005.

While he "particularly" welcomed the changes in stamp duty charges for first-time buyers, which he said could relate to a saving of € 11,000 in some cases, he also revealed that he intended to change the law to make it easier for people to get mortgages on 'affordable' housing.

Affordable houses are sold by local authorities at below market value to those whose incomes would preclude them from buying on the open market. Affordable schemes include homes in private estates which are developed on the open market, as well as houses sold under the shared ownership scheme, and sites which are provided for those who want to build their own homes.

Mr Roche said he hoped to bring forward legislation to "normalise" the contracts for "affordable housing", which would make it easier for people to secure loans from financial institutions.

However, in a bid to prevent profiteering by those approved for affordable housing, contracts of sale are organised to give local authorities "first call" on the proceeds of the house in the event of a sale.

"This is actually a handicap as most lending agencies, being the mortgage provider, require themselves to have the first charge on a house. There has been an understandable reluctance on the part of the banks and building societies to get involved in the local authorities schemes, so I hope to make it easier for people starting out rather than see them contend with up to three refusals from lending agencies," he said.

Minister Roche also repeated his assertion that some local authorities had failed to build or buy almost 9,000 social houses over the ten years to the end of 2003.

"It was suggested that this was about money but it was not, the money was there. It was also said this was about inflation eroding the amount of houses a local authority could provide but in fact inflation was built into the financial provision."

He said he would announce the housing allocation to local authorities on Sunday. Those which spend their allocation effectively may benefit from money which he said he was prepared to switch from under performing programmes in non-housing areas before the end of next year.

However, Threshold, the national housing organisation, has taken issue with the Minister's comments.

It said people on housing waiting lists "have been ignored in the budget".

While it acknowledged "some good news for first-time buyers and people living in private rented accommodation", the organisation said people who could not afford their own accommodation had been left out in the cold.

According to Ms Aideen Hayden, chairwoman of Threshold, Mr Roche used "the excuse of a lack of progress by local authorities for not delivering on the Government's commitments to social housing build".

Threshold called for an additional 10,000 social housing units to be provided in 2005, "yet only an increase of 250 units over last years' build", would be provided, she maintained.

The buck stops with Minister Roche and no one else" she said.