Aideen Hayden (Labour) | Oireachtas source

I will take an opportunity to ask a couple of questions. I refer to the limits themselves. The Governor of the Central Bank appeared before the committee yesterday and indicated that the intention in introducing these limits is effectively prudence within the financial system as opposed to looking at borrower interest per se. It is really more in the context of its role as the arbiters of the financial system.

Do the witnesses think that the limits on loan to income and loan-to-value ratios set out in the report by the Governor are the correct limits? While there is a limited amount of room for manoeuvre within the ceilings set out, is there a real linkage between those limits and a person's capacity to reasonably afford housing?

The witnesses partly answered my next question of whether a mortgage insurance scheme should be limited to first-time buyers. If the witnesses do not think it should be limited to first-time borrowers, what category of borrowers should be included in such a scheme?

I am happy that some of our discussion has referred to the general question of home ownership rather than focusing specifically on mortgage insurance schemes. Several witnesses appear to think the introduction of these limits, and the timeline on them, are premature because we need a broader debate on home ownership. One of the issues that regularly arises is housing supply. Some of the evidence presented to us this morning in regard to the UK indicated that similar mortgage deposit schemes have stimulated supply. Some of the witnesses appear to disagree with this. To what extent do they accept that a mortgage insurance scheme would improve supply?

The Governor indicated that he does not think access to credit creates greater equality. I am not convinced that is so. If one considers, for example, the type of finance available to people on lower incomes through the local authorities in the 1970s and 1980s, it is not true to say that access to finance for lower income households did not create equality. Access to finance offered access to assets, which does in fact provide more equality in society. I will not outline the data but I can assure the witnesses that numerous journal articles have been written on the subject. If we do not go down the road of putting in place some means whereby people who have a capacity to pay, in other words, they are going to be paying rents that are possibly higher than the amount of mortgage they are asked to pay but do not have the resources to come up with a deposit of 20%, are effectively being locked out of life opportunities that will enable them to have the type of asset base that other people who are lucky enough to have wealthy parents can access. Given that some of these are societal issues - I accept they are not necessarily issues for the Central Bank - and that the committee has been asked by the Minister for Finance to consider this question because he wants our views on it, is there an interface between regulation and issues that are important to society? How do we deal with those issues, if that is not too broad a question?

Dr. Lyons referred to apartment developments. I had reason recently to be involved in a very extensive discussion about apartment developments in Ireland during the Celtic tiger years. He asked why we need higher space standards in Ireland than apply in Copenhagen or Barcelona. Apart from the fact that we had pathetic design in this country between 1990 and approximately 2005 - I make no excuse for saying that - we do not have communal facilities or services and our society does not have a history of apartment living. For these reasons, it is a broader issue than the internal four walls of any particular apartment.