Shane Ross (Independent)

I do not understand how anybody with sympathy for the young people of this country could disagree with the sentiments expressed in the motion. It is one of the great problems of the success of the Celtic tiger that the property market has taken off to such an extent that so many people cannot afford to buy houses. It is an issue the Government has been unable to address successfully. The motion expresses an aspiration which everybody in the nation has to own their own house, regardless of whether it is cheap or expensive. That aspiration is difficult to fulfil in this booming market.

I understand the sentiments of the Labour Party, particularly given the figures that were released today in a report by DKM and the EBS. The report showed that the proportion of people's income going to pay their mortgages was continuing to rise and that the amounts being paid are unparalleled. The motion identifies and addresses the problem very successfully but the difficulty is how it will be solved.

It is important to note that it is not just people on the modest incomes mentioned in the motion who are excluded from the housing market. It is also people with middle and high incomes. There are people at every level of income who cannot get on the property ladder. The problem here is not necessarily one which the Government can immediately resolve.

People are using the most extraordinarily devious means to get on the property ladder. These means are forced on them by the price of houses. They include going to the bank and telling a pack of lies about their incomes and expenses. The banks accept those lies, knowing quite well that they are lies, and give them the loans. There is massive competition for mortgages, which means the housing boom is being fuelled by the banks.

The main problem is not the Government which, to a large extent, is sitting back and letting the market operate. One of the great problems is that the banks are bending over backwards to lend money to people who cannot afford it. The rise in interest rates in the last few days signals the beginning of a difficult period for many young people in this country whose mortgage repayments will become far more difficult to pay. Then the banks will demand payments which people will be unable to pay.

I do not blame the Government for the boom in the property market but, to some extent, those who are lending money recklessly to people who, one day, will be unable to afford to repay that money. All sorts of bogus stress tests are conducted on people. We know these are bogus because the amounts that the banks are prepared to lend to people to get into the property market are now from six to nine times their income. In more prudent days, the amounts were two or three times their income. The banks pick out those to whom they lend but some people cannot borrow from lending institutions at all and cannot get on the housing ladder as a result.

We are dealing with a pretty unscrupulous industry. We should not necessarily seek increased taxation and I note the motion does not mention that. It refers to control over development land so perhaps it is implied in that regard. It would be dangerous to increase taxation. In particular, it would be dangerous to increase the level of capital gains tax. However, it should be acknowledged that the Government has an interest in the property market continuing to boom. It takes an enormous amount of money from it through capital gains tax, stamp duty and VAT. Could the Government examine ways — and I do not believe the stamp duty argument — whereby it could reduce taxation and thereby free up property in the property market?