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Go raibh maith agat, a Cheann Comhairle. The main issue with any house purchasing scheme is affordability to the buyer. One third of younger working households cannot afford to buy. It is possible that many people who rent privately would take advantage of the co-ownership scheme to get on to the property ladder. A number of independent research projects have confirmed the usefulness of co-ownership and its effectiveness as a way of assisting people to buy affordable homes. The scheme can be user-friendly and does focus on the needs of aspiring local homebuyers.
The private-rental sector plays an important role in meeting housing needs. It has been recommended that consideration be given to the merits of assessing all applicants for co-ownership under the common selection scheme in order to ensure that it tackles need and has an impact on waiting lists.
(Mr Deputy Speaker [Mr Dallat] in the Chair)
The private-rental sector has grown steadily during the past 10 years. There are now 49,000 privately rented dwellings. That sector plays an important role in meeting housing needs, particularly in areas where there is high demand for social housing. Households have no choice but to turn to the private-rental sector because there is little or no public housing available in areas such as my constituency. At present, there are approximately 37,000 people on the waiting list for public housing. It seems sensible that consideration be given to the merits of assessing all applicants for co-ownership under the common selection scheme in order to ensure that it deals with need and waiting lists.
In recent years, there has been concern over the erratic and uncertain level of funding that is provided for co-ownership. Co-Ownership Housing contributes to the social housing budget. A realistic and sustained level of funding is required to ensure that the scheme continues to develop. However, funding has continued to decrease from £12·9 million to £7·9 million. Projected funding is just over £5 million. The steady decrease in funding means that there has been a decrease in the number of houses that are available.
The Joseph Rowntree Foundation published a report in 2006, which recommended lowering the initial equity stake that eligible applicants can purchase, as was mentioned earlier. Lowering the initial equity stake that eligible applicants can purchase in order to access the scheme would enable more households to participate. The initial equity stake currently stands at 40%, and could be reduced to a minimum of 25%. Entry to the scheme could be at any 5% interval between 25% and 75%. Those changes would encourage more people to participate in co-ownership.
Co-Ownership Housing must increase awareness of the scheme and encourage more people to participate. As someone who was involved in the advice sector for many years before becoming an MLA, I was struck by the lack of knowledge of co-ownership. The benefits of the scheme are not always recognised. Perhaps public perceptions need to be addressed and changed. The co-ownership scheme can certainly help to alleviate some of the housing problems that exist. Priority must be given to people who are on the social-housing waiting list. The lack of affordable social housing represents a huge crisis.
There is a caveat to the motion, insofar as the Semple Review panel has not yet reported; it is however, due to do so soon. This problem must be dealt with urgently and properly; not by rhetoric, but by positive action.
Mr Speaker, A’hm strangly fer this motion accause the reality bes at hit’s no exaggeration tae alloo hoo monie fowk ir i a state o’ hoosin crisis. I particular yin hes mich cympathy wi’ thaim buyin hooses fer the furst tim.
The price o’ hooses bes a bag worry fer clatters o’ mae constituents acroass Strangford es A houl hit tae bae acroass Norlin Airlan’.
Waefully fer monie fowk the thocht o’ ownin’ the hame yin bides in hes cum tae bae a fadin’ hope fer the price o’ hooses aa the mannit maks ownin a hoose impossible.
This hes an’ wul cairry oan haein a waefu’ effect oan oor society an’ hit’s social an’ economic progress. Action bes needed the noo tae address thon.
Monie noo face intae awffy hannlins in tryin’ tae get a fit oan the furst rung o’ the hoosin ladder by buyin thair furst hame.
It is no exaggeration to state that many people are facing a housing crisis. Therefore, I am strongly in favour of the motion, particularly because it empathises with the desperate plight of first-time buyers. Housing affordability is a concern for many of my constituents in Strangford and for people throughout the rest of Northern Ireland.
Sadly, for many, the aspiration of owning one’s own home has become a fading hope. Current house prices mean that, for those people, homeownership is impossible. That has, and will continue to have, a devastating effect on society and economic progress. Urgent action is required to address the problem.
Many people now face unprecedented difficulties in attempting to get their foot on the first rung of the housing ladder. I could provide many examples of that. I will cite the example of a young woman, a graduate and a professional who works in Newtownards. She has just got a 40-year mortgage for a small terraced house. Pain is etched on the faces of parents who come to my constituency office and tell me that their children have had to move considerable distances from Newtownards in order to be able to afford their own home. That is unsustainable in the long term.
One does not have to look too far to see the crisis in housing affordability. According to the Royal Institute of Chartered Surveyors — and it should know — in April 2007, house prices rose faster in Northern Ireland than in any other region of the United Kingdom. For the first quarter of 2007, the average cost of a home in Northern Ireland stood at almost £216,000. In my constituency of Strangford, the figure is more than £10,000 in excess of that.
There was a change of 40·1% in the average cost of property in Northern Ireland in the past quarter and a change of 11·9% in the past year. Those may seem to be simply paper figures, but they are much more than that. It is salutary to note that the Council of Mortgage Lenders has noted a sharp slowdown in mortgage lending in the UK for September 2007 — a dip of 12%. We must acknowledge that that is a disaster for first-time buyers. We must address urgently the social, family and economic challenges that house prices present. Research indicates that the cost of housing has led to many couples delaying having a family — with all the implications that that has for our ageing population.
Affording a mortgage has led to many families having to rely on two incomes — just to get by — which has an impact on family life. If we do not take action now— and we must take action now — how many of the key workers in our society, such as nurses, will find it impossible to live, work and own their homes in their local areas? Many schemes, such as the Living over the Shop town centre initiative, can help. We need to allocate land specifically for social housing. Co-ownership is clearly part of the solution and must be part of long-term strategic housing planning. Co-ownership allows people to have a home without having to raise the entire mortgage. If a person can raise 50% of the mortgage, he or she can rent the remaining 50%. If the person’s financial position improves, he or she can acquire more of the mortgage on the property — perhaps 75%. Eventually, he or she can gain total ownership of the property.
We need to expand the co-ownership scheme to alleviate housing stress. Evidence across the UK indicates that it is increasingly difficult to access co-ownership and that there are lengthening waiting lists. We can all say amen to that. Affordable housing assists in building strong communities. Health, education and the core of family life improves with better social housing.
Across Members’ constituencies, we all understand and appreciate the needs and aspirations of families in relation to housing. In supporting the motion, I seek to have a healthy, affordable, and — above all — sustainable property market that has the capacity to meet those identified needs. I support the motion.
I apologise to the House because I failed, until now, to declare and register an interest in the motion, given that I have a married relative who is an employee of the Northern Ireland Co-Ownership Housing Association Ltd. I now place that on the record.
The issue of affordability cannot be approached simply from the point of view of housing supply. At the heart of affordability lies the purchaser’s ability to buy. That is the core issue that today’s motion addresses. There is a need for more flexible financial instruments that would enable that to happen. Those adjustments could be put in place without the need for legislation in what is already an over-regulated market. We have only one vehicle for shared ownership in Northern Ireland — the Northern Ireland Co-Ownership Housing Association Ltd. That compares with 101 shared-ownership housing associations across the rest of the United Kingdom.
Wales has 10 shared-ownership housing associations; the south-west of England has 15; the Midlands has 12; London and the south-east has 43; the north-east, with a population of 2·5 million, has eight; and the north-west has 12. Interestingly, in Scotland, where house-price rises are considerably slower than they are here, there is, just like here, only one shared-ownership association. The national average indicates that there is one housing association for every 500,000 people.
However, I do not believe that the answer lies in a greater number of agencies or housing associations offering shared ownership mortgages. Rather, the answer lies in widening the range of options that are available through shared ownership.
I make it clear that the Northern Ireland Co-Ownership Housing Association deserves our praise for its work — it has done a very good job. A recent analysis by Professors McGreal, Berry and Adair on behalf of the Department for Social Development noted, and confirmed, the ability of the co-ownership scheme to bring an appreciable number of households into the owner-occupied sector over the past 25 years. That was achieved at a relatively low cost, and, indeed, the association has been a net contributor of funds to Government over the past 10 years.
A recent study concluded that the co-ownership scheme had been a highly cost-effective initiative for the public purse. However, we should be concerned about the first-time buyer, not just the public purse. The housing market is driven in part by population growth. Northern Ireland’s population has grown by 75,000 in the past eight years, which, apart from the economic catch-up factor after the end of the so-called Troubles, is one of the main drivers of house prices here. It is a mistake to see Northern Ireland’s house-price market as merely a subset of the national UK housing market.
Apart from all those factors, which may see Northern Ireland’s housing market improving on national averages, one grim reality lies behind all affordability issues — the interest rate. That interest rate will make mortgages either possible or impossible for first-time buyers. Having said that, widening the equity spread that is taken by shared-ownership housing associations from 40%-75% to 25%-75% would have a considerable impact on affordability.
I thank the Member for giving way. He talked about the importance of young people getting on the property ladder. Does he also accept that in Northern Ireland there is a severe shortage of suitable housing for senior citizens, who also sometimes find that they are unable to afford mortgage payments? There is an opportunity to create a co-ownership scheme that is similar to those that operate in many parts of mainland GB for that area of the housing market in Northern Ireland.
I largely agree with the Member’s point. It would be a far better financial option for young people — and, indeed, for older people — and particularly first-time buyers, to own a stake in the home that they live in, rather than simply pay rent. At least they would then have a part share in an appreciating asset. For such individuals, rent money is dead money.
Home ownership is therefore the dream to which people aspire, and we must help them to realise their aspirations in a property-owning and prosperous democracy. It must never become a case of them and us, with the public sector against the private sector. That is the road to nowhere. We, for our part, must ensure that this Assembly provides the mechanism through which that can happen. I support the motion.
Much has been said that does not bear repetition at this point, so I will make a few general points. Given the house-price hyperinflation, as it were, of the past two or more years, everyone in the House recognises that it is clear that we have an affordability crisis.
However, in the margins at least, we have a mechanism for dealing with that, which is co-ownership. It is clear that the model and the organisation that we have are admired by others outside this jurisdiction. Some years ago, when at the University of Ulster, I had the benefit of being a student of Alan Murie, who is an expert on housing. In ‘A Home of My Own’, the report of the Government’s low cost ownership task force, he remarked that Northern Ireland’s co-ownership scheme was a real success. He said that:
“The problems with shared ownership in England are partly to do with the diversity of providers”
— which Mr Kennedy referred to —
“and the complexity with detailed differences between different providers. In this sense again Northern Ireland has a great advantage in having a single co-ownership scheme which is tried and tested and presents no problems to lenders and others. It also appears to have been successfully targeted and can be used to achieve mobility within the social rented sector.”
That is praise indeed. In our current difficulties it is a useful tool. Furthermore, the House of Commons Northern Ireland Affairs Committee’s Sixth Report of Session 2003-04 also praised the co-ownership scheme and the Northern Ireland Co-Ownership Housing Association. It is important to remember, however, that it warned the then direct rule Government thus:
“We are concerned at the erratic and uncertain level of funding provided for co-ownership over recent years. In view of its success, and given the Northern Ireland Co-ownership Housing Association’s contention that it is a net contributor to the social housing budget, we find this approach difficult to understand. We recommend that a realistic and sustained level of funding is provided to ensure that the co-ownership scheme can continue to develop.”
I hope that the Minister for Social Development will take that point on board, as it is important that the co-ownership scheme be properly funded. Reserves can be used, but Government must, nonetheless, play their part in supporting co-ownership.
The Semple Report on affordable housing made several recommendations for the improvement of the co-ownership sector. First, the abolition of current property value limits and a move to an eligibility system, which is an important change in the way that the scheme should develop; secondly, a rolling property portfolio should be introduced, using a proportion of resources to provide for co-ownership; and a reduction in rents charged on equity retained by co-ownership to 2%. That is important, because it will ease the burden on people in that sector. Other Members mentioned the reduction in the initial equity stake from 40% to a minimum of 25%, and entry levels increasing by 5% thereafter on a “staircasing” structure. The Semple Report recommended the abolition of stamp duty or a waiver of land tax. I hope that the Minister for Social Development can influence the Chancellor of the Exchequer in that regard. Sir John Semple also recommended the streamlining of application processes and renewed marketing campaigns with lenders; in other words, engagement with the private sector. That will provide an imaginative and innovative way of dealing with the co-ownership sector.
Go raibh maith agat, a LeasCheann Comhairle. I welcome the motion because it furthers the debate on the difficulties that people face in trying to access affordable housing.
However, that is not what all of the motion is about. Sinn Féin has some difficulties with the 10% figure. We have all raised the issue of affordability and how difficult it is, particularly for young people, to get on the first rung of the ladder. According to Advice NI, one young person commented that the property ladder does not even have a first rung. Everyone accepts that there are difficulties.
As a member of the Committee for Social Development, and as a Member of the House, I know that Minister Ritchie has made housing a priority. She has been unequivocal about that, and that has been welcome. Co-ownership is one option on the route to accessibility. However, the figure of 10% could be problematic. Sinn Féin does not want the Assembly to impose that at this stage. The Committee for Social Development has plenty of opportunity to make the argument. In addition, there is an interdepartmental group, chaired by the Minister and advised by a panel of experts on such issues. Both groups use the Semple Report as their reference point.
I will quote from the Semple Report, which I read in research for the debate, as it is relevant to the figure of 10% that is referred to by the motion. How can the Assembly determine the housing market? It is difficult; changes are occurring. Mr Shannon and Mr Burns made the point, and Sinn Féin agrees, that the housing market is fluid. We are concerned that the target of 10% could be limiting, as we cannot predict the market. The Semple Report is the reference point for all the panels and groups that have been set up, and we should have confidence in those groups. On the housing market, the Semple Report states:
“The relationship between demand and supply for lower value private properties, applications for social housing and take up of the right to buy is complex and has a number of external drivers.”
I recommend that the Assembly have confidence in those groups and that, as my party colleagues Mr McCann and Mr Brady said, the Assembly should wait for the interdepartmental group, having been advised by the panel of experts, to report back. The Assembly would then be better informed.
The motion also refers to the expansion of co-ownership to 10% of the housing market. Sinn Féin is in favour of co-ownership per se, but, as the Semple Report points out, it is important that co-ownership be sustainable. All of those points are being taken into account, as I would hope that they would be, in the review. Sin é, a LeasCheann Comhairle.
Sinn Féin will abstain on the motion, but we are in favour of its sentiments. Go raibh maith agat.
I thank every Member who contributed to the debate, and I hope to address all the issues that have been raised. However, if I cannot do that today, I am happy to write to Members about any outstanding matters.
I support the thrust of the motion, and having listened to and reflected on Members’ contributions, the one recurrent theme was that there is insufficient affordable and social housing throughout Northern Ireland to meet the need and demand. I have no doubt that the draft Budget provides an inadequate capital resource for my Department over the next three years. However, I am exploring other options to raise private finance.
I hope that my ministerial colleagues and all Assembly Members will support my attempts to secure an adequate budget for the provision of social housing over the next three years. That is required to deal with the extremely difficult area of demand: the 36,000 people who are on social housing lists, many of whom are homeless. I want to set the record straight on that matter.
I have seen at first hand the problems that potential first-time buyers face when they try to get a foot on the housing ladder. I am determined to do all that I can to help those in greatest need. I am keen to act quickly to increase the supply of affordable housing, thereby offering real opportunities to potential first-time buyers who have recently been priced out of the market. I am fully committed to implementing those recommendations of Sir John Semple’s report on affordable housing that will increase the supply of homes.
One of Sir John Semple’s main recommendations on shared equity is to maintain co-ownership as the only shared ownership scheme in Northern Ireland. The clear benefit of a single scheme is that it is easier to understand and to deliver, and it enjoys considerable support, not least from many members of the expert panel that I established to advise on affordability.
I hope that Members will agree that the existing co-ownership scheme has been a success story over the past 29 years. The simple, flexible model, sponsored by my Department and operated by the Northern Ireland Co-Ownership Housing Association, meets a range of housing needs. Since 1978, nearly 20,000 households have been helped onto the housing ladder, 16,000 of whom have progressed to full ownership of their homes.
As Members know, co-ownership is a transitional housing tenure scheme that offers first-time buyers a stake in their first home and an opportunity to buy more equity as their circumstances allow. The scheme aims to encourage buyers to progress to full purchase of their homes, at which point the income generated is recycled to help other first-time buyers.
Property purchases are at a 10-year high, and activity this year is already treble that of 2006. Commitments have been made to purchase some 800 properties that will be occupied in 2007-08. The popularity of co-ownership is likely to continue for some time. I am committed to working with the Northern Ireland Co-Ownership Housing Association to increase capacity, but make no mistake: finding the funding to meet the large rise in demand will be challenging. I need everyone’s support to ensure that the provision of various types of social and affordable housing remains a number-one priority, which is a clear reflection of the extremely active housing market.
Although there are signs that the market has cooled in certain areas in the past few months, many first-time buyers are still unable to afford their first home. Some rent privately or extend the time that they live with parents. Others add to the growing waiting lists in social housing’s rented sector. They represent what is known as the intermediate housing market, which describes potential first-time buyers who work and often pay rent, but are unable to buy a house at the lower end of the market. My Department aims to help that group by providing shared-equity solutions.
However, as acknowledged by several experts, including Sir John Semple, determining the size of the intermediate housing market and assessing where best to target assistance to meet the need and demand is no easy task.
Nevertheless, it is clear that action must be taken. I assure Members of my firm commitment to doing all that I can to give potential first-time buyers a foot on the housing ladder. My main focus in the short to medium term is to increase the supply of affordable housing and to improve the co-ownership scheme further, in order to ensure that potential first-time buyers who have been priced out of the market receive the necessary help.
In the Semple Report, recommendations on improving the co-ownership scheme include removing the system of property-price limits and making the scheme easier to access, especially for those on lower incomes. I support the thrust of those proposals, and I am examining carefully their implications.
I am also committed to the introduction of developer contributions, as provided for in article 40 of The Planning (Northern Ireland) Order 1991, as quickly as possible. That will require developers to provide a percentage of their private housing schemes for affordable housing, both social-rented and private equity-shared. I have been heartened by the support from my ministerial colleagues Arlene Foster and Conor Murphy and their departmental officials on the issue. I am meeting Arlene Foster tomorrow to examine ways in which to speed up the introduction of developer contributions.
I am encouraged by the early signs that affordable housing has been provided on new developments. There is a good example of that in Derry where ILEX, the urban regeneration company, is setting aside a large number of units on the Ebrington site for private affordable housing.
I continue to work closely with the Northern Ireland Co-Ownership Housing Association to explore other avenues to increase supply. I saw the benefits of partnership between the Co-Ownership Housing Association and Habitat for Humanity when I visited the Model Farm project in Downpatrick on 15 June and on 20 October. Such projects will play an important role in delivering community self-build houses for lower-income households. Habitat for Humanity has other schemes in Northern Ireland. I am encouraging the Co-Ownership Housing Association to develop proposals for other pilots and initiatives, including closer working relationships with other housing associations and private-sector developers.
Funding is always an issue, and we must find new and innovative ways in which to lever more private finance into the housing arena. To that end, I am working with Baroness Ford, the chairperson of English Partnerships, to identify opportunities and to learn from experiences elsewhere. My officials have been in discussions with the Council of Mortgage Lenders, and I will host a seminar in Belfast on 28 November on making best use of private finance. The Council of Mortgage Lenders is bringing across eight members of financial institutions that are not currently involved in lending to affordable housing schemes in Northern Ireland. All housing associations, including the Co-Ownership Housing Association, the Housing Executive and other key stakeholders, such as the Northern Ireland Housing Council and the Semple panel of experts, have been invited. I look forward to an interesting and, I hope, fruitful day.
I acknowledge the recent success of Fold, Clanmil and BIH housing associations, who together recently negotiated a good deal with Barclays Bank for their borrowing for the next three years. That is a great example of housing associations working together to procure services for the benefit of a group. It augurs well for the introduction of my Department’s procurement strategy, which requires all housing associations to come together in groups to negotiate better services and management for the whole movement.
Mr Gardiner referred to changes in the level of equity to be purchased initially. The Semple Report recommended changes to the co-ownership scheme, including a lower level of equity to be purchased. I am considering those recommendations carefully. Michelle McIlveen asked why there are lower price limits in some district councils. Again, that is based on market value in given areas. Land and Property Services provides that data.
Fra McCann referred to different schemes to be introduced, and I clearly understand the benefits of one scheme covered in his speech. However, the panel of experts has set up a subgroup to look at the whole co-ownership scheme and whether it needs to be amended to meet different situations. The panel will report back to me before Christmas, and I will reflect on all the recommendations. I assure everyone that I have not just set those committees up for the sake of it. I set them up with a purpose in mind: to provide me with the best possible advice on the way forward.
Anna Lo raised the issue of whether the co-ownership scheme should target areas where the affordability problem is greatest for first-time buyers. There is some evidence to suggest that certain areas suffer greater affordability problems than others. As I work with the Northern Ireland Co-Ownership Housing Association to improve the current scheme, I will ask it to develop proposals to market and target the scheme to address that issue.
Ms Lo also asked whether the current price limits would be increased or abolished. The abolition of price limits for the co-ownership scheme is one of the recommendations in the Semple Report, and that will be considered along with other changes to the scheme recommended by the affordability review.
Jonathan Craig referred to future funding and the whole area of the comprehensive spending review. I agreed the Budget on the understanding that it was a draft Budget for consultation, with the final allocations to be agreed by the Executive in early January 2008. I assure the Assembly that I will be pushing for a greater level of funding than that proposed in the draft Budget to meet the important housing challenges that I face, and which I have already outlined.
I do not face the housing challenge on my own; the Executive, the Assembly and the people of Northern Ireland also face it, particularly the many young people who have experienced terrible difficulties in accessing the first rung on the property ladder. People experience many other difficulties, such as homelessness and living in houses that do not meet the decent-house standard. We must be able to continually address those issues, and I will be seeking the support of everyone in order to do that, although funding will always be a challenge.
Mickey Brady raised the need to assess all applicants for co-ownership under the common selection scheme, which is the key to the social-housing waiting list and the basis and technique used to allocate houses in the social-rented sector. Shared ownership is aimed at the intermediate housing market, which includes some households on the social-housing waiting list. The common selection scheme is not an appropriate tool to determine access to co-ownership.
Danny Kennedy raised the issue of whether other registered housing associations are interested in operating co-ownership schemes, and there are a number of registered housing associations that might be able to do that. However, in Northern Ireland, lenders and estate agents prefer to work with one organisation. A few registered housing associations are currently working with the Northern Ireland Co-Ownership Housing Association to provide for affordable housing.
My friend Mr Maginness raised issues and some research that was pointed up by various organisations, including a former lecturer of his at the University of Ulster. Another was raised by the Northern Ireland Affairs Committee when it undertook an inquiry into housing in Northern Ireland. I assure Mr Maginness that my officials and I will look into those particular matters, and I will return to him with my findings.
Finally, Claire McGill asked what 10% of the housing market represents. That is difficult to know: 10% of overall new building; 10% of the social-housing development programme; 10% of houses for sale at any time? We could be talking about large numbers, and we need to take that into account.
With the support of my Executive colleagues and of this Assembly, I am confident that we can address affordability problems and increase support for first-time home buyers. Lest we forget, that is the challenge facing the Executive, the Assembly and the people of Northern Ireland.
The motion is designed to address the issue of affordability. Until now, most of the focus in the debate on house prices has been on the actual price of the homes, the availability of land for housing, the possibility of up to 20% of new buildings being reserved for affordable housing, and public investment in social housing. The consequent debate has been somewhat unbalanced, given that it has not addressed the fundamental question of how those who are seeking to get their feet on the first rung of the ladder — if it exists — can finance that undertaking. The twin pillars of the motion seek to address that problem. The first pillar is a call to end buy-to-let mortgages, and the second seeks an extension to the lower level of equity that an individual must find to obtain a co-ownership or shared-ownership mortgage.
On 5 June, the Council of Mortgage Lenders revealed that the number of first-time buyers had fallen sharply from 18,300 in 2001 to roughly 8,000 in 2006, which is the lowest level in 26 years. The numbers of people getting on the property ladder here fell from 700 in August 2006 to just 400 for the same period this year. The Northern Ireland Housing Executive stated that the number of new home buyers in the Province has fallen considerably in recent years, with first-time buyers now accounting for less than 30% of the overall market. Between 2000 and 2005, there was a 24% decline in the number of first-time buyers in Northern Ireland, compared to a fall of just 7% in the UK as a whole. First-time buyers make up 31% of the total housing market in Northern Ireland, compared to 36% in the rest of GB. Northern Ireland has also witnessed a strong growth in house-price inflation in recent years. It rose from 22% in 2005 to 30% by mid-2006, which is higher than any other region in the UK.
Clearly, there is an acute problem in the Province that will have to be addressed through extraordinary measures. The Council of Mortgage Lenders proposed a wider shared-equity scheme, which is a suggestion that I first made in 2005. In October 2007, I again suggested an extension to the level of co-ownership from the present 4% to about 10%. I also suggested that more flexible shared-equity options should be offered, such as a 25% to 75% option. That would make homes more affordable for more people.
In his report on the review into affordable housing, Sir John Semple stated that there is scope for the Northern Ireland Co-Ownership Housing Association to expand its business and that since its inception in 1978, the association helped some 19,000 people to enjoy home ownership. Sir John also drew attention to the limits of the scheme, which largely relate to the rise in house prices. He also pointed out that the only action that the Department for Social Development took to address the problem was to raise the qualifying house-price limits for NICHA co-ownership loans to reflect more accurately market conditions by area. Nothing had been done to address the range of shared-equity options that were available to the home buyer. On 2 July 2007, I raised the matter in a supplementary question to the Minister, Margaret Ritchie, and I suggested that a wider range of equity options should be available than exists under the present co-ownership scheme. In reply, she said that she would consider that matter as part of the implementation of the affordability review.
Other countries have developed strategies for dealing with the problems that first-time buyers face. I could refer to strategies in Canada, but, for obvious reasons, I will not refer to those in America. The Assembly must develop strategies that are appropriate to our situation, and it should address causes and circumstances that are particular to us. That is why the twin-track approach is a good idea. It will end the false competition that was introduced into the system by buy-to-let mortgages, and it will widen financing options for first-time buyers in order that they can afford to get at least some equity on their home. At present, many prospective homeowners are forced to stay in the rental trap, where their money is essentially dead because it earns them no return and never becomes an investment.
I will review those contributions that the Minister has left untouched for me.
In a nutshell, the debate is about need — not greed — in the housing market. The current need has been mentioned by many Members, and I will not go over those issues again, but I remind Sinn Féin Members that the motion calls for an expansion of housing co-ownership to “at least 10%” of the overall housing market. We had to decide on a figure, and 10% is the figure that we looked at. It is not set in stone.
No, I will not give way at this time, if the Member does not mind.
We are trying to achieve a consensus to move the issue forward. I am encouraged by what the Minister said in her summary: she is working with the parties. I appeal to Sinn Féin to find a way to move forward with us on this issue. I know that it has decided to abstain from voting, but from what I heard today, I believe that all Members are, more or less, on the same wavelength.
Sam Gardiner mentioned buy-to-let mortgages and how they have contributed to pushing up the property prices. That core issue must be addressed.
Michelle McIlveen talked about the first-time buyer being disadvantaged, and she mentioned the difficulties faced by householders here when one considers the differences in pay between here and Great Britain. She said that in many cases one owner is working to pay off the mortgage, but I suggest that two owners are working to pay it off.
Tommy Burns referred to the housing crisis. I tried not to use that language in my speech, but I know exactly what he means. There is a housing crisis, and we all recognise that.
Anna Lo talked about house prices in her South Belfast constituency in particular, where there are extreme pressures put on some of the housing because it is perceived as being an affluent area of the city. She mentioned the need for more investment in the co-ownership schemes.
Jonathan Craig said that the debate on co-ownership is increasingly relevant, and he referred to the positive impact on the social housing lists that the co-ownership schemes could achieve.
Mickey Brady stated that there are 49,000 people living in private-rented social-sector housing, because insufficient numbers of public housing have been built, and even many of those that have been built are no longer available for public letting.
Jim Shannon talked about clatters of his constituents having worries about the housing situation, and he said that the housing crisis is having a devastating affect on society. He also highlighted the fact that the crisis is breaking up social cohesion, because people have to move a considerable distance out of their area to find an affordable house. Therefore the support mechanisms that they would give in other social settings are also being broken up.
Danny Kennedy talked about widening the options for co-ownership, and he complimented the association in Northern Ireland on being a cost-effective mechanism for the Government and first-time buyers.
Tom Elliott referred to the plight of our senior citizens — compared to those in other parts of the United Kingdom — and their being unable to get access to co-ownership and shared equity schemes, and I think that all Members are aware of that. That will be a growing problem in future years.
Alban Maginness said that our single system is not only helpful in its present form, but is admired outside Northern Ireland. It is not often that that is said about our systems, but he also expressed concern over the erratic levels of funding. The Minister also referred to that, and her winding-up speech contained several commercials for more money.
Claire McGill welcomed the motion for furthering the debate and expressed the Sinn Féin reservations about the 10% figure mentioned in the motion. She also said that there might not currently be a first rung on the property ladder. That was worth listening to.
Minister Ritchie undertook to address the issues concerned. She took up the theme of the lack of affordable housing in areas across Northern Ireland, and she said that her budget is less than adequate, but, as my colleague the Minister of Health, Social Services and Public Safety did in Question Time last Monday, she also stressed that it is only a draft Budget. She will explore private finance — which is to be welcomed — and she referred to the support for the existing single co-ownership scheme that has already helped 20,000 people on to the housing ladder and enabled some to progress up it. It is good that the income generated by those schemes can be recycled to help others join them.
The Minister also mentioned funding in that regard, and she was more eloquent in making her case for more funding than I could be. Her comments on article 40 of The Planning (Northern Order) 1991 will help ease some Sinn Féin concerns, particularly those mentioned by Fra McCann. Developers should provide a greater input: they should be brought to account on that. The practice of land banking is a scandal, and if the Assembly can bring developers into the loop in order to help in the provision of social housing, it should do so.
The Minister also replied to several other Members, but I will not repeat any of that. I simply reiterate my plea to Sinn Féin to support the motion, so that we can adopt a united approach.
Question put and agreed to.
That this Assembly calls for an expansion of housing co-ownership to at least 10% of the overall housing market in Northern Ireland, with a wide variety of shared equity options available to first-time homebuyers.
Adjourned at 4.50 pm.