Updated | Government ‘seeking ways’ to help persons who don’t afford 10% home loan requirement

Laws governing the rental market should be rethought in order to protect the rights of tenants while also reducing the possibility of abuse, according to Family Minister Michael Farrugia. 

Speaking at conference on housing, organised by the Anti-Poverty Forum, Farrugia reiterated that this “is not the right time to be considering rent-freezing”, adding that the government was exploring other ways to help-out those who are struggling.

The minister argued that a second problem was that some people could not afford to buy a house, because they couldn’t afford to pay the 10% required for the bank to approve a loan.

The result, he said, was that people end up paying more in rent than they would in loan repayments.

“We have held talks, even with contractors, to think of ways of addressing this,” he said, adding that he was happy to hear that APS Bank had also proposed a scheme to address this problem.

Earlier in the conference, a representative from APS bank said that the bank is proposing a scheme where it will be offering to pay the complete cost of a house, rather than 90%, to help those who could not afford to pay the down payment. The proposal also included lower interest rates on loan repayments, discounted life and building insurance, a services of a bank appointed architect and ways in which the bank can help finance furniture, fixtures and applicances at low interest rates.

The minister also said that the government’s policy of regularising planning irregularities in certain properties was also partly intended to address the problem of housing since it will allow owners to sell properties that contained irregularities.

Earlier, shadow health minister Paula Mifsud Bonnici said that the opposition was against rent-freezing, however it recognises the problem with rents, and housing in general and believes that the government has an obligation to intervene.

“Rather than freeze, maybe we can slow down the rate of increase,” she said. 

Mifsud Bonnici suggested that one solution is that of having more properties for rent. She said that there are many vacant properties in Malta and in some cases these properties are abandoned and deteriorating.

Moreover, the idea of introducing penalties on vacant housing is worth exploring, she said, adding that there needs to be more investment in the housing registry so that the government can know who vacant property belongs to and who is responsible for taking care of it.

She stressed that going forward, decisions should be based on research and correct information. “I would like to see a detailed study on the various aspects of the housing problem, such as what the demand is in Malta, how prices are increases, what is driving the increase as well as others.”

In addition to this, she said that there have been several schemes over the years that have helped people, and these should be strengthened a built upon.

Mifsud Bonnici said that many of these schemes were no longer available and appealed to the housing authority chairman, who was present for the conference, to work toward the re-introduction of certain initiatives that had previously shown results. “The Housing Authority should be given more power and resources to be better able to serve its purpose,” she added.

The PN, she said, had published a budget document in which 22 of the 91 proposals put forward, related to social justice.

Mifsud Bonnici said that the opposition has carefully analysed the Caritas poverty report and that they had adopted Caritas’ formula for defining poverty as well as their recommendation, as well as that of other NGOs, for the increase in the minimum wage.