Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I thank Deputy Donohoe for raising this significant issue and highlighting the circumstances in which people have been caught which prevents them from selling their property. To answer his question on what can be done, the banks would have ultimately to write down the loss in circumstances of catastrophic non-failure, but in the cases in question the individuals are meeting their obligations and paying their way. As a consequence, they do not fall within the group for which the Keane report proposes to provide protection.

Questions would also need to be posed about any measure taken to address this matter. For example, how many children or bedrooms would someone need to have to qualify under any new scheme? What would be required to make a scheme sufficiently targeted so as to help the group in question? Ultimately, however, someone would have to write off the loss.

As the Deputy knows, the Central Bank is in discussions with the banks about a range of new products which they must make available as part of the implementation of the recommendations of the Keane report. This issue should form part of a subset of these recommendations in order that we can unlock the potential of the people in question and allow them to move on to larger properties to meet the needs of their growing families. The solution may be for banks to show a little imagination and allow them, for example, to bring their debt or a portion thereof with them if they move home. In this regard, the Government has already proposed split and renting mortgages.

The Minister for Finance has indicated that it is difficult to confine the scope of measures taken on the tax side. However, we have an open mind on this issue and if a serious proposal were developed, I would bring it to the attention of the Minister. From what I have read about this matter, the solution lies with the banks encouraging people to move on. In the United Kingdom, people in negative equity have been able to take their mortgage with them in circumstances where they want to move elsewhere in the country and purchase another property. Perhaps this is the type of solution we should consider, rather than one that is tax driven. I concur with the Deputy that this is an important issue. We have an open mind on how to solve it.

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