Dr. Ronan Lyons:

We have a bit of a paradox with the rental market because everybody talks about how bad the Irish rental market is and when renters are surveyed they say the Irish rental market is bad for renters. However, when they are asked about their own experience, overwhelmingly renters have had very good experiences in the market. I am not trying to pretend there are no issues with it, but it is a bit of a conundrum that nobody seems able to say they are personally losing out. Everyone says they know that people find it very tough.

My worry with rent control is that is damages precisely the people whom we are trying to help. For example, say we have capped rent on a two-bed property at €1,300 and now the landlord has a choice of tenants. The rent is a signal that we need more units built. If we stop that signal we might have some positive side effects in the short term, but in the long run we actually hurt the chances of new units being built. A glorified version of what is currently happening to people on rent supplement will happen in the rental market. Landlords will be saying they do not want anyone on rent supplement, they do not want students, and they do not want groups of young professionals. They will only want to let to high-income couples with small children. There will be all sorts of discrimination. We can bring certainty around rent increases into the market, but as far as rent control is concerned, the road to hell is paved with good intentions. The group that will get hit by it is not the group in this room, but those on the lowest incomes.

The points made by Deputy Mathews and Senator Craughwell tie together and hopefully tie in with some of the comments I made earlier. Linking house prices to rental value and to incomes leaves us with the uncomfortable fact that the costs do not stack up. There is a troika - this is Peter Stafford's phrase, not mine - in the Irish housing market that is not yet aware that it is a troika, namely, the Central Bank, the Department of Finance and the Department of Environment, Community and Local Government. They effectively control the housing market but they do not do so in a joined-up way. We have measures that affect the mortgage market with no follow-up. I have discussed this with the Governor, whose response is that unfortunately he can only do what is in his remit. He cannot force the Department of Finance or the Department of the Environment, Community and Local Government to do the other bits. He can only do what he believes is best, and in his case, he has control over loan to value or loan to income.

On the issue of loan to income, I understand the point about bad lenders. The problem, coming back to Senator Barrett's point, is that the houses we now have require a greater investment relative to our incomes because most of the good additions to the minimum standards are about lowering energy bills. To lower energy bills, one needs to make a bigger upfront investment. That is good maths, because requiring people to have a certain minimum degree of insulation means they get the savings. That is, of course, a greater multiple of their income when we are just looking at the mortgage debt, but if we add mortgage, petrol, heating and electricity as the total stock of mortgage debt and related outgoings, we get a very different picture.