Peter Fitzpatrick (Louth, Independent) | Oireachtas source

I am not going to play the blame game. I want to help by coming up with solutions to help young families to get homes. Today I want to raise the very important issue of mortgage affordability, particularly for first-time buyers. As we all know, this country is in the middle of a housing crisis and while it is true that the main issue is the supply of affordable housing, another issue that can be addressed immediately is the very restrictive lending rules imposed by the Central Bank.

In my home town of Dundalk the rental price for a three-bedroom family home ranges from €1,300 to €1,800 per month. When for sale, those same houses are generally on the market for between €200,000 to €270,000. A quick calculation indicates that the average monthly mortgage repayment for these homes would be between €900 and €1,200. Under the current Central Bank rules, a young family is expected to save approximately €2,000 per month towards a deposit as well as pay rent of up to €1,800 per month. The Tánaiste will agree that this is not realistic. If a young family can afford to and can demonstrate that they are paying rent at a higher level than a comparable mortgage, it is clear that they can afford such a mortgage. A simple solution is to amend the rules to allow first-time buyers to include the rent paid for a period of three years as a virtual deposit on their mortgage application. This would clearly demonstrate their ability to repay a mortgage and remove the draconian rules which mean they have to save for a deposit while also paying ridiculously high rents. It does not add up and it does not make sense.

The figures for my home town of Dundalk show that a young family hoping to purchase their first home would have to save an average of €2,000 per month while paying rent of approximately €1,500 per month, a total of €3,500 per month. This means that the family would need a gross income of approximately €5,500 per month, or a gross annual salary of €66,000, just to pay their monthly rent and save for a deposit. This does not take account of other outgoings like food, utility and medical bills. It is clear that this is not a realistic situation for young first-time buyers in Ireland. At this rate they will be condemned to a lifetime of paying high rents, most likely to vulture funds. The Government must act now to deal with this very serious issue. People should be able to buy their first home but to earn €66,000 means, in many cases, two people working.

The Government is looking for solutions to the housing crisis and I am not here to play a blame game. Will the Government consider my suggestion regarding a virtual deposit?

See this speech in context