Mick Wallace (Wexford, Independent)
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First off, when the 20% rule was brought in a while back, some people criticised it, but I did not. I thought it was a good idea, as it would help avoid the pitfalls that so many people fall into when it comes to property. They spend too much to keep a roof over their heads. Of course, it did mean that it would be harder for a lot of people to get onto the property ladder.

The alternative was for the State to provide affordable housing, but this has not happened. The measures introduced by the State to deal with the housing crisis are not dealing with it. It has been a bonanza for investment funds and vulture funds. Our landlords are getting bigger in the sense of the number of units they can hold. There is still nothing in the world to stop developers from sitting on valuable land, watching the price of it go up. We have been talking about addressing that issue for the past five or six years, but it is still not addressed. There are huge problems with everything we are doing in terms of the provision of housing.

The Government introduced a help-to-buy scheme, which already drove up prices. This will drive them up as well. We are talking about letting NAMA build 20,000 houses that will cost approximately €330,000 each. Why does the Government not empower local authorities to build houses on the State-owned land NAMA is working on instead? They could build affordable and social houses on these sites so that people could buy them at an affordable price. This new rule of the Central Bank's will only drive up prices as well.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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The change in the first-time buyer's rebate had one aim and one aim only, namely, to drive up the price of property and homes. The entire Government policy to deal with the housing crisis has been about increasing prices. The perverse logic is that only the market can supply houses and, if it is not supplying them, we must ensure we make it worth their while to do so. We give tax breaks to developers and landlords and reduce housing and apartment standards. We give developers funds for infrastructure and public lands and cut the level of social housing in every private development required under Part V. We spend billions funding landlords to house people in private property through rent supplement, the housing assistance payment and the rental accommodation scheme and instruct NAMA to sell apartments and houses at knock-down prices to corporate landlords and vulture funds.

As each of these measures fails, the crisis worsens and the number of children and families that are homeless and in emergency accommodation increases. Rents rise beyond the capacity of ordinary working people and more and more people are turning up in the Circuit Court for repossession of their homes. Every new set of figures shows the abject failure of this Government to deal with the housing crisis. The Government's only response is to wonder how it can get the market working and increase house prices so that it is more profitable for its buddies in the building, property and landlord sectors to get out of bed and actually build houses.

I put it to the Minister of State that this move will do nothing to alleviate the housing crisis but will, in fact, bring us back to where we were eight or ten years ago.

Andrew Doyle (Wicklow, Fine Gael)
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As the House is aware, yesterday the Central Bank announced amendments to the macro-prudential regulations for residential mortgage lending. These changes will take effect from the start of next year. The Central Bank has an independent mandate to protect the stability of the Irish financial system and it first introduced the macro-prudential lending regulations in February 2015.

These regulations were the first such controls on lending in Ireland and they applied proportionate loan-to-value, LTV, and loan-to-income, LTI, limits to mortgage lending by regulated financial service providers in the Irish market. Under these regulations a borrower was subject to a general maximum loan-to-value limit of 80% of the value of a primary home property. However, the regulations also allowed for a higher 90% threshold for first-time buyers in respect of the value of a property up to an amount of €220,000 and for an 80% threshold for any value in excess of that amount. The rules also applied an LTI restriction of 3.5 times annual income. The regulations did allow a certain flexibility to banks to exceed both the LTV and LTI thresholds by up to 15% and 20% respectively in regards to each individual bank's overall primary home mortgage lending in any year.

When they were introduced, the Central Bank made clear that these controls on mortgage lending were designed to be a permanent feature of the Irish financial system. However, the Bank also committed itself to keeping the particular measures under review to ensure they are appropriately calibrated to evolving financial and economic circumstances.

For this reason, the Central Bank began its first review of the regulations earlier this year. As part of that process, the bank initiated a call for evidence based submissions. In total, it received approximately 50 external submissions as part of the review process. Yesterday, the Central Bank announced the results of this review process and confirmed that some small adjustments would be made to the regulations.

The key changes will mainly apply to first-time buyers, for whom the LTV limit of 90% will now apply to the entire value of a property rather than the first €220,000 of a mortgage loan as is currently the case. Also, the flexibility to banks to lend above the LTV limits is being adjusted. Mortgage lenders will now be able to lend up to 5% of their overall lending to first-time buyers at above the 90% LTV limit; in respect of second subsequent buyers, lenders can allow 20% of their overall mortgage loan book to exceed the 80% LTV restriction that applies to such lenders. Currently, the overall limit is 15%.

There are two other changes to the regulations, namely, the removal of large commercial borrowers from the scope of the regulations and allowing property valuations to be carried out up to four months before a loan is provided. Valuations were required to be carried out within two months of a loan being provided and this had caused some problems at the closing of some sales. More flexibility is now available at the key point in a sales transaction. Nevertheless, it should be noted that no change has been made to the LTI restrictions of 3.5 times annual income or to the exemption allowance of 20% of a lender's overall mortgage loan book.

This macro-prudential regulatory framework is designed to avoid spiral dynamics between house prices and credit volumes. This system should allow for consumers to purchase their own homes while protecting against any significant surge in property prices and preventing imprudent lending on the part of the banks. The Central Bank indicated that since the mortgage measures were initially flagged in late 2014, there has been a sharp moderation in expectations for annual gains in house prices. This is because it is widely understood that persistently high rates of increase in house prices are not likely in a system in which measures place ceilings on LTI and LTV lending ratios. Moreover, the Central Bank has indicated that the regulations will be kept under constant review and can be tightened if there is emerging evidence of elevated risks in the mortgage market.

As indicated, these refinements of the macro-prudential regulations will take effect from January 2017. From the Government's point of view, they are a prudent but welcome development that will make it a little easier for people to secure a mortgage. In particular, when taken in conjunction with the help-to-buy scheme, they should assist first-time buyers who are struggling to save the deposits required to purchase homes.

Mick Wallace (Wexford, Independent)
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It will continue to be the case that no control will be exercised over property prices or rent levels. The measures are clearly designed to increase demand and will create price inflation. Was one of the factors involved in this decision the beneficial effect these measures would have on property portfolios held by investment funds, vulture funds, real estate investment trusts, REITs, and banks? First-time buyers will be bidding against investors for new builds. The latter can afford to see prices rise, particularly in view of the fact that Ireland has the most attractive residential investment yield in Europe.

What will trigger a review of the effects of the new mortgage lending criteria and how will those effects be monitored? An annual review is planned by the Central Bank. How will the success or failure of the new criteria be measured? This morning, Sharon Donnery of the Central Bank stated that the majority of first-time applicants for loans had in excess of the previous minimum deposit of 20%. If that is the case, what is the rationale for making the proposed changes to mortgage deposit criteria? What statistics and trends underpin the proposed changes? Why has the Central Bank suddenly changed its view that a 20% deposit was the right idea? From where is the pressure is coming? It is certainly not coming from young people because they are not able to exert such pressure. The State must build affordable housing if young people are to purchase houses. This gimmick of a scheme will only drive up prices.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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The Minister for Finance, Deputy Noonan, welcomed the changes proposed by the Central Bank and indicated they will make it easier for first-time buyers to obtain a loan that will suit their needs. Some people may be able to borrow enough to get a roof over their heads but it will be at a price set by developers and one at which they believe it will yield a decent profit margin. Various sources suggest the profit margin in the current market stands at roughly €30,000 per housing unit. Success will be measured by developers being able to get out of bed for a profit of €30,000 per each unit they build and a few ordinary people being able to borrow enough to put themselves in debt for more than 30 years, with their mortgage repayments consuming 40% or 50% of their total income. This will not and cannot work and will do nothing to alleviate the crisis.

Local authorities must invest in public housing to provide permanent social housing and end the crisis that has seen thousands of people evicted, placed in emergency accommodation or languishing in private rental properties paying inflated rents. The Government has failed to deal with the crisis and until it grasps the nettle, all it is doing is pushing up profits for landlords, developers, REITs and vulture funds.

Andrew Doyle (Wicklow, Fine Gael)
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The LTI limit of 3.5 times income has not been changed. When I tried to get a mortgage 30 years ago banks applied prudent lending rules for mortgages to purchase or build a home. The LTI limit at that time was set at 2.5 times the income of the private earner in addition to 1.5 times the secondary income. Rule-of-thumb measures have traditionally been applied to mortgage lending. During the bubble, however, no rules applied and lending institutions - which have since left the Irish market - engaged in aggressive advertising to encourage people to remortgage their homes or set up current accounts on their mortgage in which they retained a certain amount. Weekend events were also held in hotels in provincial towns to highlight the value of investment properties abroad and encourage people to remortgage their homes.

The reason the Central Bank introduced new rules on mortgage lending was to control lending to first-time buyers and give them a small advantage over buyers of second and subsequent houses. Under these rules, first-time buyers could secure mortgages of 90% of the sale value for houses priced at up to €220,000. Different criteria applied for higher price houses. All the submissions received by the Central Bank have been published on its website. The submission from the Department of Finance proposed that the 90% threshold be applied to the first €320,000 cost of a home, in other words, it proposed to increase the current figure by €100,000. The Central Bank, in its wisdom, decided to remove the limit.

These changes are not aimed at increasing profits for developers or anyone else but to encourage house building. Even if we build so-called affordable houses, the basic economic fact remains that supply must meet demand if we are to get stability in the market. A graph of house-building figures for previous decades would show a spike as the rate of house building increased rapidly followed by a trough as it fell almost twice as quickly. We need to bring stability into the market and offer certainty for buyers.