Lorraine Higgins (Labour) | Oireachtas source

If ever there was as reason to save the Seanad, it might be the dedication seen tonight from various Senators, including Senator Ó Clochartaigh, Byrne and myself. On a more serious note, I thank the Minister of State for coming into the House. It is the first time I have raised a matter in the wee hours of the morning so I am grateful he is here. The matter relates to the upcoming legislation which will be debated in the House on the proposal to address the legal lacunae which exists following Ms Justice Elizabeth Dunne’s judgment in 2011 on the rights of mortgagers repossessing property belonging to mortgage holders. I am fearful that the implementation of the Land and Conveyencing Law Reform Bill 2013 will negatively impact on those homeowners who fell into mortgage arrears prior to 1 December 2009 and who, as a consequence of this Act, will be at severe risk of losing their homes. I am fearful that we as a Government will fail not only to help those struggling with mortgage debt, but also homeowners who may not yet be subject to court proceedings but are in mortgage distress as we speak. Some of these people may have some equity in their homes and have a legitimate expectation that they will be able to sell their properties. However, due to the potential flooding of the market with possibly tens of thousands of properties this will adversely affect the value of these properties. By taking action and allowing potentially tens of thousands of properties on the market for sale as a result of this legal lacuna in that many of them will be coming on the market at one time, this could, and possibly will, lead to a depression in house prices. It will play monopoly with the lives of thousands of people who are struggling to pay their way. We must be mindful of the fact that although house prices have slightly increased in the Dublin area, if we strip out this locality we will see a decrease in house prices right across the country, and they are down as much as 3% which indicates that house prices on the whole remain on a downward trajectory. House prices in my constituency of Galway East are predicted to fall by 0.3% next year. Some analyses estimate that as a result of this conveyancing Bill between 6,000 and 20,000 homes are at risk of being repossessed which will put considerable pressure on house prices throughout the State and will contribute to the continued downward trend in house prices. There is no doubt that this influx of repossessed properties and homes will only exacerbate the situation further. Some of my constituents who unfortunately are in mortgage arrears at this time are on the verge of this predicament.

While commentators in the ESRI believe that the future is bright for the country and I believe there is no doubt about that, the Government is taking significant steps to ensure that this is the way it will be into the next few years. Hopefully, next year many more will be gainfully employed and the economy will have improved and, as a consequence, house prices on the whole will begin to rise again.

As last week's figures suggest, we are back in a recession technically, and as a result, I contend, that the prospects for stabilisation or an increase in house prices remain minute. While I recognise the fact that the ugly truth is that these financial institutions must be become self-sufficient again, my question for the Minister for Justice and Equality is whether he has discussed any of the repercussions of the potential number of home repossessions may have on the housing market with the financial lenders and analysts and, if so, what approach are they going to take in that respect in the interests of stabilising the housing market?

I want to raise a related issue regarding the legal costs associated with financial institutions hiring barristers and solicitors to act on their behalf when issuing repossession proceedings and seeing these proceedings right through the courts. I know of a number of people who have been asked to pay tens of thousands of euro to have their homes repossessed or, worse still, to stop the bank from repossessing their homes. Would it not be better for the banks to hire in an in-house counsel or solicitor to act on their behalf as this would lead to lower legal costs and would not result in further indebtedness for their borrowers?