Bernard Durkan (Kildare North, Fine Gael) | Oireachtas source

I thank our guests for coming before us and for imparting their wisdom. I would agree in general with Mr. Sweetman that the intervention can often create the opposite effect to the one desired in some of these cases. I know from experience the way the process works. One of the points that has been made repeatedly is that developers cannot build because it is not profitable. In other words, they cannot make a profit. The critical factor is that the cost of the end product will be too high. The cost of the end product, the house, is one of the reasons the country was in the position it was in during recent years. What is the major contributory factor in that respect? Is that a legacy from the inflation which was created during the boom and with which we are now trying to come to terms? Does that have an ongoing impact on property prices or have we resiled from it? What is likely to happen?

I agree with the Central Bank regarding its restrictions on loans because if those restrictions were lifted, we would return to where we were previously, we would have massive inflation overnight and we would be obliged to introduce benchmarking again in order to enable people to live. The simple fact of the matter is that the disposable income in a household is automatically affected by the level of mortgage required. The repayments relating to the latter can often be more than half of the level of disposable income in many instances.

I spent yesterday in the courts with various people who were under threat of having their houses repossessed. I believe that 90% of the people want to make their repayments and all they want is to be given time, understanding and some pathway whereby they can make the payments within the confines of their ability to pay and to do so continuously to best of that ability. There is another group, probably comprising 10% of people - I received an e-mail about this only a few minutes ago - who do not wish to pay at all and whose only ambition is to get a property that is considerably less expensive than that of their next door neighbour who has had to pay a mortgage in the normal way. To what extent is it possible to encourage lenders to show compassion and consideration to those who are making the effort? The situation, as the Chairman knows, is that householders are appearing in court in tears. They are desperate and know that they are between a rock and a hard place. We have to do something that recognises their particular plight.

I am not sure whether there is an issue with the hoarding of land. I am of the view that what is happening in this regard has something to do with the prices inherited from the boom, which do not seem to have decreased. I will relay to the committee something I was told and our guests may address it if they wish. A property valuer informed me that during the initial stages of National Asset Management Agency, NAMA, coming into operation, when properties were being bought at reduced prices - 46%, 48% or whatever the percentage was of the full price - those properties were actually only worth about 10% of the full price. The individual in question was in the business and I think he knew what he was doing.

On the question of voluntary surrender, Ms Naughton made an intervention. People are being encouraged to voluntarily surrender. However, what is involved is not voluntary surrender. They are given a list of options, none of which is acceptable. Again, this affects households with children. It is horrendous to see the effect it has on the families. Can we encourage the lending institutions again to be accommodating, given that they were accommodated compassionately by the Irish taxpayer, who will continue to accommodate them well into the future? I am not getting into the argument about burning bondholders or anything of that nature. I do not agree with such behaviour because it comes back to bite one. It is necessary to impress upon the lenders that they were accommodated by the Irish nation and that they should be in some way inclined to respond in a similar fashion.