Brian Ó Domhnaill (Fianna Fail) | Oireachtas source

This is an important debate and I agree with everything that Senator Hayden said on this issue.

This is the cutting-edge issue of our time. The debate has been initiated here this evening by Senator Barrett's excellent work. I attended the briefing session this morning and some of the statistics which were brought forward would in themselves suggest that something needs to be done urgently in this area.

The issue extends to the homelessness crisis as well. It affects everyone in society, including those who own a home and those who wish to own a home. It is an issue about which the Government has received media attention over the past number of weeks, but it needs to be addressed.

I commend Senator Barrett on bringing forward this legislation which endeavours to bring together a model to provide finance to individuals who want to provide a home for themselves and their families because the banking system is not fit for purpose in this regard. Today, one of the retail banks, Bank of Ireland, does not even want to deal with customers anymore. It sees people as a nuisance. Ultimately, if it is left to deal with the current housing situation in terms of supplying liquidity to build or buy homes, it simply will not happen. The State needs to provide some form of assistance to ordinary people who are struggling, and to whom my colleague, Senator Darragh O'Brien, referred. Often these have been referred to by politicians as the garda and the nurse who cannot afford a mortgage. Unless the State intervenes and cuts the toxicity between the bank and the citizen, and creates somewhere in the middle to provide a safe haven through the corporation referred to by Senator Barrett, we will not deal with this issue.

As I stated, I attended the briefing and looked at the Canadian model, which is being outlined. The Canadian website is most informative. It provides up-to-date statistics, which are neither commercial statistics nor provided by any financial institution. They are provided by an independent corporation.

We need such a form of independence in this State also. With the best will in the world, economists are providing statistics on the marketplace but these are being provided through commercial operations. We need a corporation such as the one proposed in the Bill. The Canadian model looks at the issue of housing need and it is helping Canadians access quality affordable homes and helping to develop vibrant local communities. That is what we all are trying to do here - it is what every Member of the Oireachtas wants to achieve - but we need to provide a protocol in order for that to be achieved.

There is a housing crisis and there is a rental crisis in Dublin. People cannot afford rents. Young people, who once would have come to Dublin from my north-west area of Donegal to obtain work, are going abroad as an alternative now because they cannot afford to rent in the city. That is wrong and something must be done about it.

The response from the Government this evening is disappointing. It is extremely disappointing that the thrust of this Bill has not been accepted and that the House must divide on an excellent piece of work that provides a roadmap. The Bill may not address all of the issues but it provides a roadmap from the crossroads we have reached towards dealing with this issue.

There is the usual departmental response, that NAMA will solve all of the woes, that other issues are being dealt with, and that some of the proposal will be considered and it will be looked at somewhere down the road.This is an issue that needs to be dealt with now. The thrust of the Bill should be accepted, and if there are to be changes, those changes can be brought in on Committee or Report Stage. Senator Barrett referred to Ronan Lyons. He has provided some excellent resources and data on this issue over recent years and some of the information he is providing is very stark. If one looks at a mortgage at the moment, the new lending rules are having an impact. There is no question about that. However, I would be a strong proponent of the new lending rules because of some of the dangerous situations people got themselves into, where it was 100% mortgages and sometimes 110% mortgages. There should be a savings mechanism built into home ownership and the Central Bank.

However, the Central Bank and the regulator are not doing enough to drive down the cost of mortgages. At the moment, variable rate mortgages are at around 4.5% for a new mortgage. If an individual purchases a house for €350,000 at the moment with a deposit of €70,000 and this person is getting a mortgage of €280,000 over a period of 25 years at a 4.5% annual interest rate, that will equate to a monthly payment somewhere in the region of €1,550. Over 25 years, the cost of that loan will be €465,000 on a home that is valued at €350,000 today and a mortgage of €280,000. That means the bank is making almost €187,000 in interest from that. No wonder they do not want their customers at the front door. No wonder they are looking at borrowing the money at less than 1% and selling it off at 4.5%.

Banks are fleecing people and the Government has not intervened. Perhaps there is a vested interest since the Department of Finance recapitalised the banks and there are shareholdings within the banks. That is why the framework proposed in this Bill is so vital. It provides a hands-off approach, taking it away from the banks, away from the Department and off the balance sheet, where everyone is a winner but the most important people who win are the people who need housing at the moment. It is terrible to read stories in newspapers of people, and we all know of them as well, in their 30s who have to continue living at home because they cannot get onto the property ladder. That is the crisis of our time. It is an extension of the homeless situation and while that continues to explode, there will be a lack of supply. There must be a tapering on house prices.

Another issue is the cost of building a house, which currently is probably more than the cost of buying a house. There is an issue that needs to be addressed in that respect and regulations are being brought in by the current Administration which expand on the cost of building. I commend Senator Barrett on all his hard work on this issue. The Minister of State, Deputy Ring, is probably a supporter of this work, but the Minister for Finance should be here if possible and the Government should accept this legislation and allow it to go forward in the spirit of where it is coming from.