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

I thank the Minister of State for her explicit response. Often, what we get are scripted responses to Topical Issues. It is obvious this evening that the Minister of State has given her attention to the issue I have raised.

The Minister of State referred to the 80:20 scheme introduced by NAMA, which is a welcome development that allows people to purchase a home at 80% of its value and which provides that where a property loses 20% of its value, the purchaser will realise it over a period of his or her mortgage. The Minister of State also set out the Department's policy in terms of it remaining neutral on this issue and in regard to the concept of enticing people into making purchases when it might not be suitable for them. While I concur with the Minister of State's sentiments on this, the fact remains that Ireland will remain a home purchasing nation for those who can afford to do so and therein lies the nub of the issue, namely, what is determined as affordability. In my view, house prices have almost reached the point of normalisation, namely, that they now cost three to four times the rate of annual income. The average price of a house countrywide is currently three to four times the annual national industrial wage.

Another issue that arises is that of social dividend and NAMA's responsibility in this regard. I am aware that the Department has delivered housing options for homeless agencies and through the 80:20 scheme. However, in terms of dealing with enticement of concerns, we are now presented with a unique opportunity in terms of the lending model applied in the rent-to-buy scheme being robustly structured to reflect the lending criteria set out in 2009 by the Central Bank, which acknowledged the mistakes of the past when people were permitted to include overtime pay, secondary rental income and so on into the equation when applying for mortgages, resulting in purchasing prices in some parts of the country increasing from two to three times a person's income to ten to 12 times his or her income.

I note the Minister of State's undertaking to take up this matter with the Minister, Deputy Hogan. Members of this House are experiencing difficulty engaging with NAMA owing to how the NAMA legislation is drafted. On one occasion I had to obtain senior counsel advice because of the manner in which NAMA is structured. I believe some engagement should take place with NAMA at departmental level, be it the Department of the Environment, Community and Local Government or the Department of Finance, in regard to the stock which it has in hand, some of which may not be saleable or may be in remote locations. There are NAMA estates on the periphery of Cork city which, if normalisation of the market occurred, could become attractive to purchasers. The scheme I am promoting this evening is for first-time buyers and owner-occupiers rather than investors.

I ask that the Minister of State request NAMA to examine what stock it has in hand which, in terms of location and affordability, would be attractive to purchasers on a 20 to 25 year term rather than the 30 to 35 year term witnessed in the past and to ensure that the mortgage product put in place and structure of same would be such that it would be sustainable and would, in the context of prospective purchases, be reflective of the rent they are currently paying in these properties.

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