Ciarán Lynch (Cork South Central, Labour)
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Housing supply increased substantially in the years prior to 2008, as noted by Dr. Bacon and others, and this did not appear to restrain house price inflation at the time. Loan-to-value rules were not properly implemented and, by Dr. Bacon's own terms, income ratios began to drift out of sync. In addition, in the buy-to-let sector, 100% mortgages, interest-only payments and so forth were provided. Mortgages terms were also extended to 35 years. This is a summary of the behaviour in the residential property sector at the time. Are housing markets somewhat different from other markets in that normal rules of supply and demand often do not explain how they work? David McWilliams, in his testimony to the inquiry last week, stated that the crisis was very much credit-fuelled and was not an issue of supply and demand.