Ciarán Lynch (Cork South Central, Labour) | Oireachtas source

I thank the office of the Ceann Comhairle for allowing me to raise this matter this evening. I also thank the Minister of State, Deputy Jan O'Sullivan, for coming to the Chamber personally to respond. I could commend the Minister of State on the many actions she has taken on since she acquired this brief, but as I have only four minutes I will deal with the matter at hand, which is the consideration, if any, that has been given to instituting a rent-to-buy scheme for NAMA residential properties for first-time buyers and prospective owner-occupiers.

The Government has two clearly identifiable tasks related to home ownership and both relate to normalising the residential property market. First, we need to deal with people who have bought homes and find themselves in financial distress. We have seen actions arising from the Keane report, the most significant of which is the Personal Insolvency Bill, at present before the House. However, we also need to look to the present and the future and create a normalised residential property market, which does not favour investment over the purchase of a home, as we witnessed in the bubble years. Despite the difficulties in the residential property market in recent years, we will continue to be a home-buying nation. In future people will continue to have the ambition to live in a home they own.

At present, NAMA has 14,000 residential properties in the State, 9,000 of which are being rented. I propose the introduction of a rent-to-buy programme to deal with these NAMA properties. A structured plan and scheme should be examined in conjunction with NAMA to make that happen. People interested in purchasing a home have two concerns. First, they are concerned over whether house prices will continue to drop and, second, they are concerned about the security of their jobs and incomes. The Government has taken action on the house prices, with the implementation of the Residential Property Price Register database a number of weeks ago, which gives clarity and a degree of certainty to that issue. Obviously that needs adjustment to give more clarity as to the property type - whether it is a flat, a house or an apartment, the number of bedrooms and the floor area - because at the moment it just gives an address.

There is also the issue of salary security, and the option of a rent-to-buy programme would allow people, who are paying rent which is the equivalent of a mortgage, to do so over a period of two to three years and the rent, accruing over a period of time, would act as a deposit, which would also deal with the issue of loan to value. Since 2009 the Central Bank has correctly tightened up on the lending practices of the past. It also needs to tighten up on loan-to-value requirements, along with the required income levels for those who are purchasing. Over a two to three year period, people in a position to pay market rents in a rent-to-buy programme should be able to achieve loan-to-value percentages of 90% to 95%.

NAMA would be also beneficiaries of such a proposal. NAMA has estates throughout the country, some of which are category 3 ghost estates which means they require a minimum amount of adjustment to take them out of the ghost estate ranking. However, they require maintenance and security. By putting into those estates residents, who had the intention of purchasing those homes over a number of years, we would establish communities, the dereliction of these sites would be halted and the existing cost of security on these sites could be used to get them corrected. We would succeed in normalising the housing market by putting in place a robust rent-to-by programme with proper lending practices. It would deal with a housing crisis that will arise in a few years with a young population and an ongoing demand for property purchase into the future that will need to be met. Why not meet that demand now with the 14,000 NAMA properties, 9,000 of which are being rented. Surely we should try to get those rented properties purchased.

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