Aideen Hayden (Labour) | Oireachtas source

I thank Deputy Humphreys for sharing time and welcome the Governor of the Central Bank to the joint committee. My comments will focus on mortgage arrears in the buy-to-let sector. Since the beginning of 2013, the number of receivers appointed to landlords' interests in buy-to-let properties under the deed of mortgage has increased significantly. As the Governor is aware, having referred to the matter, the Land and Conveyancing Law Reform Act 2013, which was recently passed by the Seanad, will facilitate the recovery through the courts of a greater number of buy-to-let properties. I note from the documentation provided by the Central Bank that, by the end of June 2013, of the buy-to-let mortgages where solutions had been proposed, 74% were either to be surrendered or legal action was to be taken. This figure significantly exceeds the solutions provided in the principal dwelling sector.

The rental sector accounts for 20% of the entire housing market. Families live in rented dwelling and, as the property market recovers, they fear that greater problems will emerge. There is evidence that receivers are entering properties, taking rents from tenants, treating them as the legal occupiers and seeking to remove them without giving appropriate notice.

Professor Honohan indicated the Central Bank's approach was not only about achieving regulatory objectives but also involved consumer protection. There appears to be no consumer protection available to tenants in buy-to-let properties. Given that the mortgages for such properties were granted on the basis that the properties would be let, damage to tenants in the sector was reasonably foreseeable. Guidance issued recently by the Irish Banking Federation appears to indicate that, while it is perfectly fine for tenants to pay rents to receivers under deeds of mortgage, the receiver has no obligation to the tenant in respect of repairs. I do not regard this as reasonable consumer protection. Does the Governor have any comment to make on the issue?

Similarly, the Governor indicated the code of conduct on mortgage arrears is designed to protect consumers. A code of conduct is not available for buy-to-let mortgage arrears. If such a code were in place, it would ensure greater transparency among the financial institutions and by landlords and tenants and ensure the financial institutions respected and upheld tenants rights.