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

We are dealing with the help to buy scheme section of the Bill. Negative equity problems are not referenced anywhere in the Bill. I have already replied to the points made by Deputy Donnelly.

Regarding Deputy Pearse Doherty's point that no construction activity will take place in the next ten months, he is not correct. Many sites have been opened and builders pace their developments to correspond to demand. They will build three houses between now and the summer or they will build 23 houses between now and the summer. On sites that are already open, builders can expand supply when they believe that there is a demand that they can meet profitably. There will be additional houses between now and the review.

In response to the point made by Deputy Joan Burton, the prudential rules already take into account the capacity of people to pay. According to the bank, it works as follows. While it is not specifically referenced in the prudential rules, on the issue of people paying rent in excess of what it would cost to service a mortgage, when banks are assessing ability to pay, they take this into account. Therefore, when they are adjudicating on a mortgage application, one of the things at which they look is the ability of the applicant to service the mortgage subsequently. A major consideration is if they are already paying rent which exceeds the repayment on a mortgage. They are then seen as being in position to so do. It is taken into account on the bank side but not-----

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