The Government has rejected a Fianna Fáil Bill to increase the number of local authority houses sold to tenants under a discounted purchase scheme.

Citing the need to preserve and increase the numbers of local authority houses, Minister for Housing Simon Coveney said the Government would oppose the Private Members' Bill.

The legislation, introduced in the Dáil on Wednesday, seeks to expand the scheme that allows local authority tenants to buy their houses at significant discounts of up to 60 per cent.

The scheme is not available to some classes of local authority houses, including those built under Part V of the Planning Acts, which required 20 per cent of new developments be dedicated to social housing.

Fianna Fáil wants the scheme opened to Part V tenants.

Under previous tenant purchase schemes, nearly 25,000 houses were sold at discounts to local authority tenants.

Value discount

The scheme commenced on January 1st, under which tenants can purchase their houses from the local authority and receive a discount of 40-60 per cent on the value.

This scheme will remain in operation pending a review in 2017, though Mr Coveney said there had been “strong interest” in it so far this year.

A charge is maintained by the local authority over the house for the amount of the discount, but it reduces automatically every year.

Opposing the Fianna Fáil Bill, Mr Coveney cited this week’s publication of the Housing Strategy and the need to increase the numbers of social houses.

He also stressed the Government’s intention to establish more integrated communities, comprised of both social and private housing.

Introducing an amendment to the Bill, the Minister said the sale of houses to tenants secured under Part V would go against the objectives of Part V, “as these houses could be sold on, and would no longer be available for people in need of social housing support”.

He was supported by Sinn Féin TDs. Several questioned the wisdom of selling off publicly owned housing at this time, though most said they supported the principle of helping tenants buy their own homes.

Tenant purchase schemes, allowing residents of council houses to purchase their own homes, were popularised in Britain by Margaret Thatcher, who promoted the sale of more than one million council homes.

Irish schemes have been more limited. The Department of Housing said 2,000-3,000 houses a year were sold to tenants in the late 1990s, falling to a few hundred in recent years.

Price increases

Commenting on the Government’s housing action plan, economist Colm McCarthy said State assistance for first-time buyers would not address the issue of a shortage of housing and would only serve to further increase house prices.

“The problem with giving grants to people who might be thinking of buying houses is that it doesn’t summon forth any additional houses,” he said.

“It does summon forth additional people who might be trying to buy them, and it will push up the price of houses.”

Mr McCarthy made the comments during an Irish Times Inside Politics podcast at the MacGill Summer School in Glenties, Co Donegal.

“Giving grants on the demand side of the market, or giving tax breaks on the supply side of the market, does not address the issue,” he warned.

"The issue in housing in Ireland is that there is a serious shortage in housing, particularly in the area around Dublin. Prices are far too high, and we need to address that."