Mr. Patrick Davitt:

On behalf of the Institute of Professional Auctioneers and Valuers, IPAV, I thank the Chairman and the members for the opportunity to make this short presentation to them on our priorities for budget 2015.
By way of background, IPAV is the representative body for almost 1,000 auctioneers and valuers nationwide. Founded in 1971, the institute’s main aim is to promote the highest professional standards among members at all times. As we stated in the submission, IPAV believes that a properly functioning housing and mortgage market is essential for a properly functioning economy and a stable society. Most observers, including ourselves, believe that the industry is now beginning to experience a modest improvement, although there are signs of many tiers beginning to emerge. Central to making the market stable and sustainable is a proper and adequate supply of new housing, and that should be the Government’s main priority for the property industry. Incentives to purchase are of little use if there is not an adequate supply. The Forfás report on Ireland’s construction sector and Construction 2020both offer a number of worthwhile ideas and aims, but we believe now is the time for more immediate and concrete measures to be taken.
I will highlight a few of those measures. I believe strongly in the need for the creation of a national property authority. That should consist of representatives of all the relevant stakeholders and would advise the Minister and Government of the day. The lack of such advice was a prime cause of the property boom and bust, and immediate steps should be taken to ensure that never happens again. It is important to have a body of such experts on hand to identify and address problems and provide advice and guidelines to policy makers.
Demand for housing is at an all time high in Dublin’s inner city yet it is estimated that between the canals there are approximately 155 acres of land and some 300 vacant sites that could be used for building residential and commercial property. While NAMA and others have announced plans to restart various programmes, the introduction of a vacant site levy in budget 2015 would propel this drive to increase the supply of housing in areas where it is most needed.
Regarding NAMA property sales, NAMA is currently selling off large numbers of apartments in huge tranches. While this might have been understandable in the early days of the property downturn, IPAV believes it now makes sense to sell these units individually or in small lots. That would have the double advantage of securing more money per unit for the Exchequer and give young people and investors the opportunity to buy directly from NAMA, thereby cutting out the middleman, which is generally some foreign investment vehicle looking to make a quick profit.
The planning process clearly needs to be more flexible, notably with regard to getting the construction sector moving again. Most young couples like to buy houses eventually rather than apartments in Ireland and it seems logical that many of the planning permissions previously granted for apartments must be converted to housing. IPAV believes a fast-track approach should be developed for all local authorities. We can look to the planning process in greater London where planning applications have to be validated inside 14 days, with a further 30 days for planning.
Regarding universal mortgage insurance, some measures are clearly needed to help first-time buyers get on the property ladder. Mortgage lenders are currently under pressure to rebuild profitability and reduce the size of their balance sheets. Hence there is no incentive to engage in high loan to value, LTV, lending. IPAV believes the creation of a universal mortgage insurance model would provide an incentive for such lenders to engage in high level LTV loans and to provide relatively low interest loans to borrowers. This model already operates in many other countries, including the United Kingdom, and we believe the Government should give it a high priority in the October budget.
With regard to renting directly, the rent a room scheme has been reasonably successful but it needs to be extended. Currently, if a property owner earns €10,100 or more in gross income, the whole amount of income is taxed. It would make far better sense if only the excess above €10,100 was liable for tax. I thank the members for listening and I will be happy to take questions later.