Fewer housing loans paid out despite sharp rise in demand

Fewer local authority housing loans were paid out to people in Kilkenny last year than in 2015, despite a marked increase in the number of applications for them.

Figures from Kilkenny County Council show that the amount of applications for loans rose by almost 40% in 2016, but fewer than half were approved and paid out. The total value of loans given out was €3.7 million.

Annuity loans make up the bulk of the applications, and there were 84 applications last year up from 62 the previous year. While 44 were paid out in 2015, the number paid out in 2016 was 29.

For an annuity loan, the maximum amount the council can advance is €200,000 – or 97% of the house’s value.

The loans can be used to purchase second-hand or new builds, and the applicant must be a first-time buyer, although there are exceptions for divorced or separated couples. There are income limits of under €50,000 for a single person and under €75,000 for a couple.

At the March meeting of the Piltown Municipal District, senior executive officer Martin Mullally noted that housing loan activity had ‘increased substantially in the current climate’.

He said that, as a lender of last resort, the council nonetheless had an obligation to lend responsibly and the refusal rate was high.

“We've the same criteria to assess – is it sustainable, are you in a position [to maintain it],” he said.

Cllr Eamon Aylward said he had an issue with the council being a lender of last resort, and said there should be an agreement between Credit Unions and councils to compete with the banks.

Cllr Melissa O' Neill said the loans were a fantastic idea, and she was delighted to see people applying for them. Cllr Tomás Breathnach said there were some great benefits to the council’s lending.

“There is a relationship built up, and there is security there because their lending agency is a local authority,” he said.