Michael McCarthy (Labour)

I will make some points which I did not get a chance to address in my initial contribution. A retrograde step taken by the Government over the past few years, which I believe was intentional, was the abolition of the first-time buyer's grant. We had many debates in this House about this step. The €3,800 which was available under the scheme went some way towards providing a deposit or easing the financial burden on the thousands of young people who availed of it.

The impact of increased development charges on developers has also added to the burden on house buyers who must pay these charges. I have consistently made the point that there has been a massive increase in development charges for houses in rural areas. As a result, the development charges of some one-off rural houses on grant of permission are now between €4,000 and €6,000. Before the former Minister for the Environment, Heritage and Local Government, Deputy Cullen, announced the increase in development charges, such charges in rural areas would have been significantly lower. If one factors in the abolition of the first-time buyer's grant and the increase in development charges, one is talking about figures of between €6,000 and €8,000, which represents a considerable amount of money for someone who is just starting out and is already under pressure to put together a deposit and obtain a mortgage.

I agree with Senator Scanlon's argument that the 100% mortgage is necessary to allow people to borrow the levels of money now required to enter the housing market. One does not need to be a housing consultant to know this. I am aware that it raises genuine concerns in some quarters. However, if this mortgage product was not on the market, many more young people would have featured in the house price affordability index for the last few days. It is a necessary evil.

The emergence of management companies is another recent development. While such companies are needed to run apartment blocks, they should be abolished in housing estates. There should be an outright ban on management companies for housing estates and stricter limits put in place to enforce the workings of those in apartment blocks. They are charging residents annual fees of thousands of euro in some instances to provide services such as roads and water, which are normally the responsibility of local authorities. This places an extra financial burden on people who already find themselves in considerable debt. The management companies should not be charged with responsibility for services that were heretofore those of local authorities, namely, roads, water, sewerage and public lighting. The Minister of State, Deputy Michael Ahern, will be familiar with these issues in his constituency of Cork East. This matter must be addressed.

Senator Cox made a good point in respect of rent supplement, as I did in my initial contribution. Rent supplement costs the State €400 million per annum. Approximately 60,000 tenants in private rented accommodation avail of this payment. It is a direct transfer of money from the State to private landlords, some of whom have received generous concessions via tax breaks. They are benefiting twice. We have continually fought to abolish the rent supplement and allowance and replace them with a genuine housing benefit. Senator Coghlan's point on abolishing stage payments was excellent. As the Minister of State knows, stage payments are rampant in the Cork area. Operating the system in one area but not in others is unfair.

I wished to ask the Minister of State, Deputy Noel Ahern, a question on the extension of the tenant purchase scheme to occupiers of two-bedroom houses, which is welcome. Recently, there have been media reports in this regard. While I was in my office, I listened to the Minister of State speak on this issue, which forms part of the basis of the motion. An Irish-based company has successfully provided affordable housing in the United Kingdom with the construction of a £60,000 house. There is no reason this idea could not be replicated here.

The company, which brought its expertise and fought tooth and nail with 80 other developers to win the contract, has won much prestige as a result. Would it not be good if we as public representatives could tell the many thousands of people who are in the trap of being unable to afford homes that they could build homes for €90,000? All it takes is political will.