Joan Burton (Dublin West, Labour) | Oireachtas source

I want to pick up on one of the elements of the Minister's commentary on the Central Bank. The Daft.iereport published yesterday which showed a massive increase in rents included as an example the cost of a mortgage to buy in Dublin 5 as being €1,287, whereas the rent on the same house would be €1,500 per month. There is a sector of people who are renting and may have very good jobs. The Minister spoke about the Central Bank. I made a submission to it in which I strongly proposed that it take into account those persons who were renting for a significant period, perhaps two or three years, in assessing their financial discipline and ability to pay in identifying the deposit needed by them. People who had been working for ten or 12 years but did not buy because it was too expensive at the tail-end of the Celtic tiger period rented as many celebrity economists had advised them to do at the time. Initially, there were a lot of rental properties available, but those families are now stuck. If someone has two or three kids and rent payments of €1,500 to €1,800 per month, his or her capacity to save for a deposit is much more limited than someone who lives at home. I am sure the Governor of the Central Bank heartily approves of the latter, but there are other things that have to be done to enable people to purchase a home. People are paying extraordinarily high rents in Dublin, Cork and Limerick as mentioned in the Daft.iereport. The monthly mortgage repayment on the house mentioned would be €1,287, but the rent would be €1,500 and the landlord would probably come back to say there were others who would be willing to add another €200 or €300 to the rent because they were so anxious to secure the property. That is a real problem and it requires rent regulation. However, that is a separate issue which I will not raise now. In identifying areas where one could help people who need to be able to buy a house and who have the wherewithal to do so one would be much better placed in requesting the Central Bank to look at this issue. Many of the local authorities in the Dublin area, in particular my local authority of Fingal County Council, have always looked at people's financial commitments. If they were paying rent for a significant period, with all of the discipline that involved, they were allowed to include this in the assessment in respect of a mortgage to rent property, a low-rise mortgage or a local authority SDA loan.

Other than the flashy publicity the scheme has generated, I am not sure of the point of it. The Minister's feeling may be that generating that publicity will, in some way, kick start the market, but I do not think that will happen. At this time having serious house price rises is counterintuitive to everything about the market. The problem for developers who cannot build is that they do not have the credit lines and equity the banks now require in order to obtain credit. The purpose of the amendment is to reduce significantly the time period for which the scheme would extend to provide in real time for an actual assessment of its impact. This goes against everything that has been said about introducing new tax breaks and incentives. They should be costed and evaluated and there should be a cost-benefit analysis and an impact assessment, with decisions being made on that basis thereafter.