Dessie Ellis (Dublin North West, Sinn Fein)

On 1 July 2003, the then Sinn Féin housing spokesperson, Arthur Morgan, issued a statement in response to the figures on house prices and mortgages which at the time were spiralling out of control. He accused the main lending institutions of fuelling the fires of unacceptable house price increases. He stated that the main banks, building societies and other lending institutions had a moral and social obligation to curb the excessive and potentially ruinous amounts that were currently being given out in mortgage loans. He outlined that the ever-spiralling house prices showed that the lending institutions were continuing with a reckless if not criminal policy of providing excessive mortgages, especially to first-time buyers and that it should not be allowed to continue. The banks, building societies and other lending institutions were giving away mortgages, in some cases of up to five and six times the amount of annual income coming into a home, sometimes more. We are feeling the effects of that now.

At the time, Sinn Féin said that the lending institutions must realise that their drive for profit and greed needed to be tempered by their social and moral obligation not to allow people to borrow beyond their means and that the excessive and potentially ruinous amounts being given away in mortgages must be curbed. We said all of that in 2003. Other parties and the media said that we were wrong and that we did not have a clue. They did not take us seriously. I take no pleasure in pointing out that we were completely right. Everything we said when it came to mortgages, about the developers being a law unto themselves, the ridiculously high price of house and the immoral amounts of money that was lent to people – all came to pass.

Everyone acknowledges that something needs to be done about unsustainable mortgages. The Government would not listen to us in 2003, and it is refusing to listen to us in 2011. It is all well and good talking about supporting the mortgage interest supplement scheme, but that fails to acknowledge that the mortgage arrears of some people are so severe that in a single lifetime they will never be able to repay what they owe. A report today from Standard & Poor's indicated that house prices are likely to fall in this country for a few years to come. The statistics indicate that there are approximately 45,000 mortgage accounts in arrears for more than 90 days. That amounts to 5.7% of residential mortgages, which is very high given the comparatively high level of home ownership in this State. The European Central Bank has no problem in increasing interest rates. Unemployment continues to go up, wages are being cut, yet we must all wait for the penny to drop with the Government while it refers to providing supports to mortgage holders in difficulty by making advice available through MABS. I accept that MABS does great work but a budgeting service is of no benefit to a person who has no prospect of ever being able to get back on track with his or her mortgage.

While the Government fiddles as Rome burns to the ground around us, we in Sinn Féin have come up with proposals that should be adopted to address the problem. We commend the Technical Group for proposing the motion, which we urge other Deputies to support, but we need concrete proposals to address the issue, not meaningless amendments as proposed by Fianna Fáil and the Minister for Finance which only reiterate policies that clearly are not working. At least it is clear to the rest of us who take the time to listen to people, as opposed to just seeking direction from the IMF, the absentee landlords of Ireland, on what to do. As my colleague, Deputy Pearse Doherty, outlined last night, Sinn Féin will launch detailed proposals on tackling mortgage distress in the coming period. Debt resolution cannot be left waiting. The Government must begin to take housing policy seriously.

Last year, a group of respected economists also urged that the banks introduce some form of debt resolution and that they accept part of the loss as their own. Given that the State is now effectively running the banking sector, the Government must take proactive measures to force all of the banks and other financial institutions, including the sub-prime lenders who appear to be the most aggressive pursuers of repossessions, to provide real relief for mortgage holders. One cannot leave people in a situation where, through the reckless lending of the banks who were allowed do whatever they liked, they are left shackled with debt around their necks that they will never be able to pay.

Local authorities are just as guilty as the banks when it comes to reckless lending. People were given loans when there was no way they could afford to pay them. Now, the Government must also address the unsustainable mortgages held by those who purchased homes in affordable housing schemes and shared ownership schemes and are local authority mortgage holders. Those who bought in shared ownership schemes generally see their interest rates go up with ECB increases. The Housing Finance Agency makes decisions on whether increases and decreases are passed on to the mortgage holder. The last time there was an ECB decrease, it was not passed on to those mortgage holders. An interest increase was announced days after it emerged that these mortgage holders were six times more likely to be in arrears in comparison to their counterparts who borrowed from banks. The figures have shown almost one in three people with a local authority housing loan are in arrears. Approximately 25,000 of those who have an affordable home, tenant purchase or shared ownership loan from their local authority have not paid for three months or more, according to figures compiled by one RTE report.

The Government has a bizarre attitude when it comes to housing. In the Finance Bill it included a provision to attach a €100 stamp duty fee to the purchase of affordable homes.

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