Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I thank the witnesses for their presentations. I found them very informative and enjoyed them also. "Enjoyment" is a word I do not use at meetings of this committee too often as we are usually bogged down with very serious and heavy financial stuff. The delegates put their views across very fairly and clearly.
Let me dig in a little deeper based on what the committee is tasked with. This matter has evolved in quite a strange way. Earlier this year, Construction 2020 included a commitment that the mortgage insurance scheme would be rolled out by the Government after economic analysis. Its inclusion in the Finance Bill was to depend on the economic analysis. It now appears it is over to this committee. This is it; it is we who are making the proposal to the Government on this. Therefore, the delegates' input is very much welcome.
I actually came out against this scheme when it was originally mooted. I questioned the Minister for Finance, Deputy Noonan, on this. The transcript states:

All we are talking about anyway is the State [we were talking about the State at that time] covering 10% or 15% of a mortgage for a limited period, to get somebody over the hump and into a house. Then they might get promoted at work after the five years or whatever is the time period we decide. It would be for first-time buyers and there would be a capital cap on it. We will return to the issue again. If I proceed, it will be announced in the Finance Bill.

Obviously, the Government is no longer thinking about State involvement but about private sector insurance, with the possibility of caps. We have to discuss caps and I would like the delegates' views on them. If we were to proceed, would it be important to have caps?
As I stated, I do not support increasing the loan-to-value ratio to 95%, which was the Minister's intention. The Minister suggested that, while it failed in London, it increased supply by 30% outside London. He argues this is a supply issue. I am not suggesting it is but would like the delegates to comment on that.
With regard to phasing in, Mr. Burgess mentioned an arrangement such as the one under discussion. We are making a mess of this. When I say "we", I am talking about the institutions of the State. My hunch is that the Government announced the increasing of the loan-to-value ratio to 95% without proper thinking. The Central Bank was not all too happy. The flag was budget day so the Central Bank said it was reducing the loan-to-value ratio to 80%. Mr. Deeter said he does not agree with either ratio. There is a genuine question to be asked. We have two different proposals that are not running together and we are supposed to be making a determination on each of them. The big problem is that if the Central Bank goes in with an 80% loan-to-value ratio, which we probably need in Ireland, we must ask what it would do when there is a social housing crisis, a rental market crisis and a lack of property. How do we fix the problem at this point? Is mortgage insurance a part of the solution?
Do the delegates believe this will deal with the supply-side? With regard to loan-to-value ratios, if mortgage insurance were to be introduced what limits should apply? Do the delegates believe 95%, which is the conventional percentage across areas where this operates, is the appropriate figure? Should it be lower? Do they agree that if mortgage insurance were introduced, it should be targeted at first-time buyers? Do they believe in caps? Alternatively, do they believe we should stay 100 million miles away from this on the grounds that there are other issues to be resolved and that mortgage insurance is not part of the solution?