Fergal Browne (Fine Gael)

I used to live in the house beside Fagans pub with which I am sure everybody is familiar. The rent on that property now would probably equal the mortgage repayments if it had been bought some years ago. This is a very serious issue and I do not understand how couples buy properties. Many of the so-called cheaper properties are only 700 sq. ft. God help the couple if they have a row as even at opposite ends of the house they would still be near each other and this might contribute to marriage break-up. I do not know what these people will do when they start having children. However, that is a matter for another day.

I welcome the Bill which, in the interest of facilitating access to affordable housing, Fine Gael supports. It is a two section Bill that will enable the smooth operation of the affordable housing initiative of Sustaining Progress and, in particular, the provision of affordable housing mortgages by banks. Up to now, affordable housing could only be purchased through a loan from a local authority because of the need of a clawback in the event of an early sale by those seeking to make a quick profit. Under the legislation, if an affordable housing unit is purchased and quickly resold, the sale will not be finalised unless the vast majority of the profit is paid back to the local authority. The Bill allows local authorities to enforce this clawback. Without it, they would be forced to pursue vendors for money. This would prove time-consuming, expensive and difficult.

In publishing the Bill, the Department made specific mention of the Bank of Ireland's "Breakthrough" mortgage product for affordable housing which would be inaccessible if the Bill were not passed. Under the proposed arrangements, the average price of a new house would be €222,000 in Dublin and €180,000 elsewhere. Meanwhile, the Irish Home Builders Association has put forward a separate proposal for local authorities to work in partnership with builders to deliver affordable houses on council owned land banks and green spaces in existing council estates. The popular conception is that affordable housing is for the socially disadvantaged. However, support for the Bill will lead to a situation where people on any income, who feel priced out of the housing market, despite earning a good salary, can apply for a loan through private lenders.

While Fine Gael welcomes the Bill, I cannot but mention that the backdrop against which it is set is depressing. A foot on the housing ladder has in recent years become a tantalising foot too far. Permanent TSB has stated that the average price paid for a house in Ireland in September was €252,431, up over €18,000 on that recorded in December 2003. This is good news for people who own property but it is bad news for those trying to get on the property ladder. The average price paid for a house in Dublin in 2004 was €330,000, while outside the capital it was €222,000. The equivalent prices in September 2003 were €296,000 and €195,000. This represents an increase of 11.5% and 13.6% in the 12 months to September 2004 in Dublin and outside Dublin, respectively.

Only 315 affordable housing units were acquired under Part V of the Planning and Development Act 2000. Figures show that just 12 county councils and two city councils acquired any social and affordable houses under the Act. Dublin City Council acquired 11 houses, while Cork City Council did not acquire any. Department of Environment, Heritage and Local Government sources say the modest number came about as a result of builders using stockpiles of planning permissions granted for land purchased prior to the introduction of the 20% clause in August 1999.

Internal projections compiled by the Department of the Environment, Heritage and Local Government estimate that around 500 social and affordable houses will be built in 2004, 1,000 in 2005 and 2,000 in 2006. By October 2002, 52,726 families were waiting for local authority housing. This was up from 39,176 in 1999, an increase of almost one third. In the 2002 programme for Government, we were promised, "We will assist the voluntary housing sector so that the target of 4000 accommodation units per annum envisaged under the national development plan can be reached". However, only 187 affordable housing units were completed last year, only 315 affordable housing units were acquired under Part V of Planning and Development Act 2000 and figures show that just 12 county councils and two city councils acquired any social and affordable houses under the Act. This is a case of reality versus idealism.

Government plans announced on 29 December 2003 for 3,600 affordable housing units in Dublin, Cork and Waterford will deliver 2,550 units for the capital, less than 1,000 for Cork and a meagre 100 for Waterford. In October 2002, 52,726 families were waiting for local authority housing. This was up from 39,176 in 1999 — an increase of almost one third. There are 5,581 homeless people in Ireland, living in 3,773 households. In Dublin, 4,060 people, including 1,140 children, are homeless. These figures are taken from the housing statistical bulletin for the period September 2003 to 21 January 2004. The Simon Community claims that the figures are a gross underestimation.

Contrary to the opinion of the Minister of State's brother, the changes to stamp duty announced in the recent budget mean the average first-time buyer in Dublin will not be exempt from stamp duty. This is thanks to the Government's failure to set a reasonable threshold for exemption. Stamp duty should have been abolished completely for all first-time buyers. Putting in place levels and thresholds leads to difficulties, particularly in the Dublin market where it is impossible to buy a house for less than €300,000.