Mr. Sean O'Connor:

The gearing is starting to bite now. It is interesting that it is probably the element that lenders worry about least because of the system and because we are fixing interest rates and matching payment terms. It is starting to make boards of associations nervous because it is a lot of debt. I do not know the collective figures for borrowings but I know my association has spent circa €250 million per year in the past four years. It is a lot of money to go through.

The houses are there and will be there in perpetuity. It is a lot of borrowing and the boards are starting to consider where is the limit. We are starting to see a move away from CALF to a grant or equity system as a sensible way forward. What would the limitations be? The Savills report recommended a golden rule that our association is adopting of no more than 85% and we have a hard break at that point. We are currently at 76% gearing and we are the highest geared association. It ticks up very slowly the bigger one gets and the more borrowing there is. It ticks up slower.