Peter Burke (Longford-Westmeath, Fine Gael) | Oireachtas source

I thank Members for their contributions. I know they have valid concerns about this initiative and I can see them. The Minister, Deputy Darragh O'Brien, has committed that this scheme will be reviewed after one year, including in his discussions with the Department of Public Expenditure and Reform.If there are any unintended consequences, those will be watched closely. I will bring the Senators' concerns back to the Minister. Senator Casey quite rightly put into perspective the share of the market and possible adverse consequences, which are difficult to see with the size of the scheme.

A few other points are sometimes missed in the debate. The ESRI was honest and open that it did not assume any increase in supply when adjudicating on the scheme. That is why this Bill and the Land Development Agency Bill have a significant number of supply-inducing measures. The Land Development Agency will increase the supply of social and affordable homes by up to 100% in the Dublin area, with a minimum of 50% in other areas, but it will be higher than that. The provision of Part V affordable homes will increase from 10% to 20%.

Senator Cummins referred to the help to buy scheme, which helped 22,000 families to get keys for their homes for the first time. The ESRI has welcomed the Rebuilding Ireland home loan and stated that it is a good initiative because it is a targeted measure to incentivise provision of homes. This may reconfigure the marketplace to create better output of three-bed semi-detached starter homes that need to be produced because there is a significant market and there has been a substantial delay. When people are removed from the rental market, with many paying 35% or more to service their rental payment than they would to service their mortgage, that frees up a property for the marketplace, which could potentially happen through this scheme. That should not be discounted. I know that it should be time-limited and monitored, and I concur with those remarks.

Any intervention that we make needs to be watched closely. For people who are in touching distance of getting their own home under macroprudential rules who cannot quite get there because of the affordability measure, the options are to do nothing and wait for these schemes to have an impact, which will take time, or to take action, which we are trying here, to give people the opportunity to get their own home in the marketplace. The National Audit Office in the UK stated that such a scheme helped to increase supply. There are many other measures and this has to be seen in a broader context. If this was the sole measure, I would be concerned, but the fact that it is a measure coupled and compounded with a suite of measures to try to increase supply mitigates it. I appreciate and understand the concerns. We will keep an eye on it. The Minister has said that it will be targeted and time-limited, and will be reviewed after the first year.