Home ownership option with `affordable' scheme

The Government's new "affordable housing" scheme is to be aimed primarily at those people who, due to rising house prices, have seen their chances of becoming home-owners recede dramatically in recent years. The Department of the Environment said the scheme would initially target those whose incomes, while insufficient to borrow enough to buy suitable houses on the open market, are also too large to be considered for local authority houses under the usual schemes.

"It is particularly targeted for the unprecedented situation where there are people who have sufficient funds for all other things but would not be able to provide themselves with a house," said a Department spokesman.

The criteria for inclusion in the scheme have been set by the Department at the same level as that of the shared ownership scheme where tenants initially buy half the house and rent the other half from the local authority, with an option to buy the rest of the house at a later date.

These criteria specify that an individual cannot have an income more than £20,000 per annum. In the case of a couple, the criteria for the loan are a maximum of 2 1/2 times the principal income, with 11/2 times the subsidiary income, up to £50,000.

In the case of there being more applications than available houses under the new scheme, the Department said, it would be up to local authorities to add on criteria for priority, such as dependants, unsuitable accommodation, overcrowded housing or area of origin.

The spokesman said that in the case of a person buying a home from a local authority under the proposed scheme and selling it before a 10-year period had elapsed, a "clawback" provision would allow the authority to receive most of the "windfall" profit.

If a person sold after one year, he or she would get 10 per cent of the "windfall" on the proportion of the house being purchased. After two years, they would be entitled to 20 per cent and so on, pro rata.

While there are many variables, building industry sources said yesterday that the new scheme would allow local authorities to provide houses for sums just marginally more than building costs, which are traditionally in the region of half the commercial sale price.

The Department's spokesman defended the scheme, saying that "extreme examples of houses in south Dublin suburbs will always be quoted, but the majority of building is now on the fringes and perhaps in the inner city".

He said the Government was committed to a policy of encouraging home ownership as part of measures aimed at reducing social exclusion, and the new scheme, in addition to having that advantage, "will reduce the number of large estates of single-class housing, which have been planned in the past".