Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

There has been a great deal of concern about the lack of supply of houses, particularly in the Dublin area, in recent months. The situation has changed dramatically since many of the Deputies rightly advised me of ghost estates all over the country and an oversupply of unoccupied houses. The pendulum has swung rapidly and now there is a distinct lack of supply in the Dublin area. The Government's Construction 2020 policy raised the issue of the guarantee that is the subject matter of the Deputy's question. I committed to reviewing it and we are processing that, but events have been overtaken somewhat by the initiative of the Central Bank, acting independently, in making proposals of a prudential nature confining mortgages to 80% with some exceptions. However, we must remember that the bank is engaged in a consultative process and has not yet established its policy. Like other participants, the Department of Finance will make a submission to the Central Bank setting out our position.

In principle, the guarantee is a good idea. The best operating guarantee that I have encountered - there may be others - is the one in Canada. In simple terms, its prudential rules apply to mortgages of up to 80%, but one needs to be insured if one borrows beyond that level, with the insurance provided by the private sector. One must insure back to the first Canadian dollar - in our case, the first euro - rather than just the excess piece. I would like the all-party advice of the finance committee, because party politics should not be involved. It is a question of getting it right and ensuring that we assist purchasers, particularly first-time buyers and young couples who want to buy homes.

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