Mr. Philip Jones:

The key point is that the Department is proposing that this come in on a graduated, phased basis to 2024 and 2025. That in itself will be an opportunity for preventing increases because, in reality, there are lots. We had various people coming before this committee on the planning and development Bill and many of them spoke about the number of units that are sitting there with planning permission that have not progressed. If the developers of those sites suddenly realise that in two years' time they will have to pay a fair amount of extra money, they are going to try to move quicker. Rather than increasing prices, we might get a release of some of those because the permissions in themselves only have a limited life of five years and they can no longer be extended, purely on a financial basis, as substantial work must have started. This will have the effect that some people will say, "Gosh, this is going to affect our profits; we had better move quickly." Because the Department is not bringing it in in one fell swoop, which I think would have that effect, but doing it gradually it seems to me that it would have the effect of getting more supply coming, first, which is a good thing but, second, it will dampen down the idea that it can just be added on to the price.

Most of this stuff depends on what the Central Bank will allow in terms of mortgages. Unless there is only going to be building for the luxury market – there is only a small proportion of that – the dampener is really the fiscal rules. If they try to bring the prices way above what people can afford, they will not be able to sell them. On the basis that the Department is doing this on a phased basis with 2024 for existing planning permissions followed by 2025, it may have the effect that the Department intends preventing that and in the longer term it should dampen it down.