Aideen Hayden (Labour) | Oireachtas source

In particular I also wish to thank the proposers of this Bill, Senator Barrett and his team, for their comprehensive work and for having raised this important matter. I fully support the Senator in his efforts to provide affordable finance for home ownership in Ireland. The current financial system is not fit for purpose. We lack competition in the market, which is evidenced by the fact that Irish mortgage holders pay significantly more than the European average on variable rate mortgages, if they can get them. I have yet to hear any credible reason that is the case.

The past three decades have seen the effective removal of mutual societies from the Irish financial landscape. I support the concept of the mutual, of which in the past there were many fine examples in Ireland established by groups such as teachers to enable access to home ownership, using the resources of the many. Three decades ago, we also saw local authorities being significant lenders to low-income households. They played a valuable role in securing home ownership for large numbers of Irish people, but are nowadays relegated to a minor role of lending to those refused by three lenders. That ensured they had an impaired loan book in a period when almost anyone could get a home loan.

Banks are now repairing their balance sheets and let us acknowledge the truth of the situation here, namely, the mandate is not one of social good, but responsibility to their shareholders. I have long suggested that we need to have a significant debate on the idea of a third banking force in Ireland. I very much welcome the issues being brought before us today.

As many Members know, I have championed and supported improvements in the rental sector for some time, but it is long overdue that we should have a serious debate on the issue of home ownership. Access to home ownership has been central to Irish society for many decades. By 1998, Ireland had one of the highest rates of home ownership in the European Union, yet we are now below the EU average. Although the term "a nation of home owners" has been ascribed to the British, it could also have been ascribed to the Irish.

Successive Irish Governments have promoted home ownership and it can be argued that for many decades they did so successfully. It is true, however, that the Irish focus on home ownership has left those renting in the cold historically. It has also left a negative attitude to renting with little protection for those who rented privately and little support for the sector.It has had its impacts, for example, in what we are now see regarding renting.

There are good reasons, however, for supporting the aspiration to own one's own home, not least the fact that home ownership is perhaps the most secure form of housing. Leaving out the level of repossessions in the past number of years, we must remember that the historical rates of repossession in Ireland have been among the lowest in the world. The Irish are less poor in old age than their incomes would suggest because they do not have the same housing costs. We have to acknowledge that the Irish have a historic association with landownership that cannot be forgotten and will not go away in spite of our recent negative associations with home ownership. In fact, there is arguably a human desire to have the widest possible control over one's environment, particularly one's home, and the Irish are not alone in this regard. In the United Kingdom, for example, after its particularly difficult housing crash in the late 1980s, a survey of those whose homes were repossessed showed that in spite of their experience, the vast majority wanted to own their own home in the future. Even in countries most associated with strong rental systems, the evidence shows that before the global financial crash many of those societies, including Sweden, were moving towards larger home ownership markets.

No one will argue that the events in the years 2002 to 2008, inclusive, were not a huge mistake. The financial system expanded available finance in an already overheated market. Professor John FitzGerald estimated that there were approximately 200,000 units of unoccupied housing in Ireland in 2006 and yet the average house was costing ten times the average industrial wage. Professor P.J. Drudy coined the phrase "out of reach". That was the reality for many people who bought homes that they simply could not afford in those years. It is often now argued that we need higher house prices and higher rents to kick-start the housing market again but if those years showed us anything, it is that high prices and high rents do not deliver a fair and equitable housing system.