Owners struggle to pay for leaky home repairs

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Leaky home owners are struggling to fund repairs as controversy over a Government contribution proposal heats up.

Building and Housing Department chief executive Katrina Bach told a Parliamentary select committee yesterday that claimants were struggling to get loans to fix the leaks.

It was the department's policy to encourage people to fix problems before it got worse, she said. "The problem doesn't stay still, it's dynamic and the house will disintegrate to the point where you've got very substantial decay."

But for many homeowners that was not a viable option because there was no financial assistance available and banks were less willing to lend money because of the economic downturn.

"There are a number of people who have limited capacity to take on more debt without further assistance."

Home Owners and Buyers Association of New Zealand president John Gray said the ability to fund repairs was one of the biggest problems facing owners of leaky homes because it was easier to make a claim once repairs were finished. "To make a claim they need some certainty about the cost."

But getting funding was often difficult, as banks were wary of lending to people who already had a substantial mortgage on the house.

The Government should be offering suspensory loans to those affected so they could at least have a livable home, he said.

The select committee hearing came as North Shore Mayor Andrew Williams accused Building and Construction Minister Maurice Williamson of hanging up on him during a telephone conference.

Mr Williams, along with mayors from the four other worst affected areas, was negotiating the terms of a Government bailout scheme for leaky home owners.

Under the proposal, councils would cover 26 per cent of a claimant's repairs if the person agreed to drop legal action. The Government would provide 10 per cent of the cost and homeowners the rest.

That amounted to $31 million a year over 25 years. It was estimated it would cost $11.5 billion to fix leaky buildings.

At least 44,000 homes are believed to be affected, although there are fears it could be closer to 80,000.

Mr Williams said matters came to a head on Tuesday during the phone conversation with Mr Williamson when he suggested the deal had been set up to fail.

Eventually Mr Williamson hung up on him, he said. "He didn't want any contradictory remarks at all."

The Government's proposal was inadequate, and it would end up making money from tax and GST, Mr Williams said.

A better solution would be for councils and the Government to each contribute 25 per cent toward repairs.

Mr Williams said Mr Williamson was ill-prepared to handle such an important matter and Prime Minister John Key should step in. "He's [Williamson] not even a Cabinet minister."

Mr Key said yesterday he was already deeply involved in the problem of the leaky homes and had been for months.

Wellington Mayor Kerry Prendergast is also involved in the negotiations. She did not want to comment on Mr Williams' opinions, but said the negotiations were continuing constructively.

"This is a government that is engaged. They understand the issue."

Mr Williamson said he would not comment until the process was complete.

- © Fairfax NZ News