Olivia Mitchell (Dublin South, Fine Gael)

I very much welcome the opportunity to raise this concern which I share with many others, namely, the proposal by NAMA to sell 750 houses at terms which give buyers, in effect, a 20% discount.

I appreciate that the scheme is dressed up as one which offers insurance to buyers against a fall in the value of the property in the five-year period subsequent to the sale, but the reality is that by deferring 20% of the market price it acts as a subsidy because the down side risk of any house purchase nowadays is factored into the market price. That is the whole problem with the housing market at the moment, and one of the reasons it has not bottomed out.

I have a number of concerns on this issue. The first is that it exposes the taxpayer to further risk. The taxpayer who paid to buy the original loan on the asset is now being asked to subsidise the sale of the asset as well.

The argument that the sale would generate VAT revenue and that the most taxpayers could lose would be €65 million is utterly spurious. There would be VAT revenue and no risk if the houses were sold at whatever the market would bear, however low that might be.

My second concern is the market manipulation of house prices, which is precisely what caused our current economic woes and is totally contrary to current Government policy. It artificially inflates the notional value of a house. This is a complete distortion of the housing market and prevents, or at least postpones, the return to any kind of a real market for houses, whatever that level may be.

My third concern is related. It is the damaging impact on other house sales and on the hapless owners, many of whom are in negative equity, who wish to sell their houses. These houses are, in many cases, similar to the NAMA properties and sometimes even next door to them. These vendors now find their homes unsaleable at the market price because the house next door is being sold 20% cheaper. Similar houses, which are privately owned and being privately sold are devalued by 20%. In fact, the entire housing market will now be benchmarked by this extraordinary device. It is totally artificial and is not what the housing market needs at present.

NAMA believes it does not need Government approval for this scheme and I know its powers are considerable. However, it does have a responsibility, as we do, to protect the interests of taxpayers. I do not believe this scheme does that. In fact, it is against the interests of taxpayers and I ask the Minister to consider the implications of this further exposure of taxpayers.

See this speech in context