Seanad debates

Tuesday, 10 December 2019

Housing (Regulation of Approved Housing Bodies) Bill 2019: Second Stage

 

1:30 pm

Photo of Eoghan MurphyEoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I will come to the Central Bank point in a minute as it is a little bit tangential in this Bill.

The Senator talked about the quality of new homes and the cost of heating same. Every time I visit a new housing estate and meet new families who have already moved in, because sometimes I meet them a couple of months after that, the first thing they talk about is the comfort of the home, how their home is always warm and there is always hot water. Some of them have even gone so far as to say they have noticed an improvement in their health because many of these new homes have new ventilation and airflow systems. Computers run these homes, which is interesting to see. These people also talk about how cheap it is to heat their homes, etc., compared with what they spent previously on fuel and how their bills have been dramatically reduced. That is something important to recognise because people sometimes question the cost of building new homes. It is a lot more expensive to build new homes today than it was ten years ago because we have improved the standards so much.

In terms of Central Bank lending and the macroprudential rules, the Central Bank is independent of the Government. One of the things that is interesting, and we continue to shout about it, is that under the Rebuilding Ireland home loan a 3.5 income multiplier does not apply.While one has to have a 10% deposit for the Rebuilding Ireland home loan, the affordability criteria is based on being able to use one third of one's income to service the mortgage. It is an exception to the Central Bank rules because it is targeted at people who may not be able to get a mortgage from one of the banks because the interest rate charged is too high or because of the macroprudential rules. It would be interesting to see data on the Central Bank's exception policy. It can give limited exceptions to either the 3.5 income multiple or the 10% deposit to each bank. Is it giving those exceptions to people who are on lower salaries or is it giving them to people who are already on very high salaries and able to afford a home to allow them to buy an even more expensive home? Should the exceptions be targeted at people who cannot afford to buy a home but who could with an exception? Data from the Central Bank on what the banks are doing in that regard would be very interesting but the Central Bank is independent of Government so we cannot interfere.

We are, however, perfectly able to express our opinions as to where we believe these exceptions should be targeted. The whole point of the macroprudential rules is to make sure that people are not borrowing an amount they cannot afford to pay back should there be a shock to their circumstances. We have to recognise that people who might be starting off in very good jobs, such as a teacher, a nurse or a garda, will always be needed. We will always need them to perform that role and they will always have a certain guaranteed income. Why exclude them from the exceptions which individual banks may deploy? Again, it is a matter for the Central Bank to decide on that. I just believe it would be interesting to discuss given that we are able to give out mortgages based on what people can afford to pay based on one third of their income through the local authorities. Obviously, we have robust criteria in place to make sure that we are not lending to people who cannot afford to repay. That is, however, tangential to the Bill we are discussing, which relates to housing bodies.

I thank Senators for their contributions. I note that all of the Senators who contributed were aware of exactly what was in the Bill and of the changes that were made as the Bill came through Committee and Report Stages in the Dáil. Everyone is aware of what is in it. I would like to conclude this Bill as quickly as possible and get this regulator up and running because housing bodies will again deliver thousands of social housing homes next year and even more in the following year. This is long overdue.

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