Michael Noonan (Limerick City, Fine Gael)

I refer to Senator Colm Burke's comment first, on letters of undertaking not being honoured. This is an issue. There is no doubt that slipshod solicitors as well as slipshod bankers were involved in much property dealing. Some of this came to light when loans were being transferred to NAMA and that organisation has a fairly good idea of the level of the problem with the deeds of some of the properties in question. However, it is not a very big issue in regard to individual mortgages. There is a lot of property on the loan-to-rent side which has issues but in the case of the individual family which takes out a mortgage the legal proceedings are not so complex and I do not believe there is a very large difficulty about the letters of undertaking. The solution we propose to all mortgage impairment is to take it on a case by case basis. If there is a legal flaw, that needs to be resolved in the context of resolving the repayment schedule, if that is being addressed.

I refer to letting unfurnished as distinct from furnished property, the latter being the practice in Ireland. That is a matter for the market. The market here is being driven by the fact that most people in Ireland aspire to own rather than rent their homes. Traditionally, the rental element of the Irish property market has been for the young, the carefree and the single, who want their place furnished because they do not want the capital investment required by an empty apartment before taking up residence in it. When they settle down and have partners and children they aspire to acquire their own home, get a mortgage and make the purchase. There now appears to be a breakdown in that and information is coming from the banks that shows that some couples are looking at rental as a permanent solution. The market may now respond in the German way, as described by the Senator.

I do not agree with Senator Mac Sharry's suggestion that the banks are being favoured by the Department of Finance - they are not.