Stanley calls for government to address distressed mortgages and loans taken out through local authorities
Sinn Féin spokesperson on environment, community and local government Brian Stanley has called on the government to address the issue of distressed mortgages and loans taken out through local authorities.
His call came following a debate in the Dáil this week which he initiated.
The Laois Offaly TD said;
“The issue of distressed mortgages and loans taken out through local authorities is not being talked about. These loans were for affordable housing, shared ownership and annuity local authority loans. Many of the people who took out these loans are now unemployed and caught in a trap of huge negative equity. This problem is now escalating.
“In Co. Laois for example, out of a total of 514 loans, there are 136 loans in arrears of three months or more. Figures provided to me by Offaly County Council show that out of 253 local authority loans, 89 have arrears of over 6 months. If these houses are repossessed and people are evicted, it would cause a range of problems. The houses are boarded up for months and then sold for less than half the original price leaving both the householder and the local authority hit with a negative equity loan debt. The families that are affected then have to be given rent allowance and join the local authority social housing waiting list, which in turn is putting huge pressure on the local authorities.
“Similar to the situation with private sector loans, measures need to be put in place to address this situation, such as burden sharing, local authorities taking ownership and renting back to the lender, and interest repayments only or deferral of repayments.
“In the case of shared ownership loans, immediate relief can be sought through reducing the rent on the portion of the home that the local authority owns on the 50% of the house that’s being rented. Instead, rent on this portion is increasing at 4% per year. This is under the direct control of the Department of Environment, Community and Local Government and I’m asking the Minister to deal with this as a matter of urgency.
“While there is an Inter Departmental Review group in place nothing is happening. There are no outcomes and no solutions. No local authority should evict anyone with a local authority loan. Making these people homeless means that the local authority will have to rehouse them anyway. This issue will not resolve itself and the government must act immediately.”