Dr. Donal McManus:

I will respond to a couple of the issues. In respect of the Housing Finance Agency, quite a lot of finance is coming into this sector at present because investors know they can get a reasonable return from the payment and availability, P and A, agreement. Government gilts are at a low level and the return is much higher in the sector. Consequently, there has not been much of an issue in respect of the scale of finance coming into the sector as such, it is just a process of translating that loan finance into schemes on the ground. While we have finance on one side, what we do not have at present is product. Over the past four or five years, the sector used acquisitions in the private market, that is, it bought properties and used the Housing Finance Agency and other finance bodies to acquire those properties. However, that product no longer is available to the same extent as it was. This is why, as has been mentioned, the whole emphasis now is on new build in order to get sites assembled. We have called for a land assembly programme. Sites have been identified by the Housing Agency and others and this should be translated into a land assembly programme. For a number of years, we had a very good low-cost site scheme operated by the local authorities. That worked very successfully as housing associations accessed that scheme and translated it into new build. In respect of community councils, that was a key tool 20 years ago, when community councils and voluntary groups donated sites to housing associations to deliver units. However, that option is no longer there as most of those sites have been taken up. Consequently, we have been relying on the private sector to bring forward both sites and new-build developments. However, we still need a number of options for sites and that is why a low-cost site scheme, which was successful a number of years ago, should be reactivated. In addition, there is land within the land aggregation scheme that could be used for the sector. It is important to focus on the issue of land now because it takes two or three years for it to go through the system. This is why a land assembly programme in place now would help to translate into units over the coming years.

As for the issue of the purpose of regulation, it is not a complete inhibitor for finance bodies that there is only a voluntary code at present because three years ago, we did not have the Housing Finance Agency and did not have the participation of the three banks. They now are coming in because they can see a return and as long as one can repay the loans, there is a return. Moreover, there is a structure in this context. The payment and availability agreement is quite a useful structure even in European terms. It is a cash flow for housing associations to repay investors over 30 years and is reasonably solid. Consequently, I do not believe that, in itself, it is an impediment. However, what I think will help is that as it becomes more statutory, it may help to lower the price coming in at that time. At present, there are approximately 12 approved housing bodies that have been approved by the Housing Finance Agency and probably a further half-dozen housing associations are accessing private finance. One thing that has not been done yet is accessing the capital markets, although there have been some discussions internally within the sector on whether it would be possible to have a special finance vehicle controlled by AHBs. Deputy Catherine Murphy should note that idea is off-balance sheet and we are trying to progress. However, the lack of statutory regulation has not been a full inhibitor up to now because some financial institutions realise this will happen, albeit perhaps within six months or in one year's time. The benefit of having statutory regulation is it could bring in even more investors because they know there is intervention and engagement and consequently, it will not go awry.