Government proposal will attempt to impose price controls on newly built homes.
A government proposal would look to introduce a form of control on house prices. The proposal is seen as a reaction to the announcement by some builders that they are increasing house prices to take account of higher labour and raw material costs.
Builders will have to get a certificate of reasonable value from the department before advertising their houses or entering into any sales contracts.
Minister for Local Government Bobby Molloy has announced a new form of control on the price of new houses where grants are being sought. New houses will require a certificate of reasonable value from 1 February 1973. The certificates will be issued by the Department of Local Government. The builder then has to display the approved price and ground rent on the site. A builder who wishes to increase the price of a house after the issuing of a certificate will need to apply for a new certificate. If a builder has already received a grant allocation, they will have to build the house before 1 May after which they will have to apply for a certificate of reasonable value.
If the department decides that the house is not good value, the house can be refused a certificate. As a consequence, the builder will lose the local authority grant, the nine year rates remission and the relief from stamp duty. All of these grants and benefits can exceed a thousand pounds. The scheme also allows inspectors from the Department of Local Government to examine the profit margins of builders.
Minister Bobby Molloy's statement did not set out the criteria for allocation of a certificate. The decision would be made by officers from the Department of Local Government.
A spokesperson for the construction industry Michael Green says that the basic problem is the price and scarcity of serviced land, the cost of raw materials and the cost of labour. Unless the supply of serviced land is improved, the housing shortage would not be addressed. Michael Green believes that the proposals are too strict and an alternative could be the establishment of a watchdog.
An RTÉ News report broadcast on 9 January 1973. The reporter is Donal Kelly.
