Kieran O'Donnell (Fine Gael)
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In regard to the submission by Ulster Bank Ireland to the Central Bank on the mortgage changes, I want to zone in on one specific issue, that is the loan to income ratio. The standard metric measure being used at present is 3.5 times earnings. I note Mr. Mallon's observations that this is not the most precise tool as an affordability measure and may not be the only metric to use in the longer term. One of the issues that is coming to light in recent times is the phenomenon of people in their mid-30s who would have bought a property in the years 2004 to 2006, which is more than ten years ago and now find that the apartment, which is in negative equity, is too small to live in and they end up effectively renting out the apartment and renting a house for their family. The mortgage for the apartment is covered by rental income and they are paying rent on a house, which is effectively a quasi mortgage. In many cases they will not qualify for a mortgage and yet on an affordability basis they can qualify. I believe they are caught in a trap of "almost homelessness", they are effectively paying prohibitive rents on their rental home and are in negative equity on their property. They are utterly frustrated. Has this informed Mr. Mallon's thinking? I note he referred to the customers' other commitments, payment of rent while saving to purchase a property. I think this will become more relevant as time goes on.