Barry Ward (Fine Gael) | Oireachtas source

I thank the Minister of State for coming to the Chamber this morning.

I absolutely recognise the need for lending control and guidelines from the Central Bank on the importance of that lending control. We all learned an important and very hard-learned lesson over a decade ago when exactly the kind of lending we are trying to prevent allowed things to get out of control and create huge economic problems. In raising this matter, I am in no way seeking to undermine the importance of those measures or many of the tenets of those measures.

People will be aware that the measures I am talking about are essentially the guidelines the Central Bank issues to lenders on the extent to which borrowers can obtain mortgages. That is specifically what I want to focus on. Most people cannot get a mortgage for more than 80% of the value of the property being bought, which means one must have a deposit of 20% available to one. That is the case for the vast majority of people who are second or subsequent buyers of a house, apartment or other property. A small number of people qualify under what are called the first-time buyer criteria. They are allowed to borrow up to 90% of the value of the property. They are required to garner a deposit of only 10%. Let us be in no doubt but that this is still a challenge for many, which is understandable. In fact, I understand from my own circumstances how difficult it can be.

That the guidelines are in place is important but the manner in which they are applied is a little inconsistent. I agree with the 20% provision. It exists to ensure people will have the capacity to repay their loans and not end up in default or losing their homes, which, in fairness, is uncommon in this country. Banks complain about this but I believe the measure is important.

In the constituency where I live, Dún Laoghaire, the average price of a home is over €500,000. Therefore, a person who has bought a one-bedroom apartment and who now needs to move out because he or she has a family must gather a deposit of over €100,000. For most, that is absolutely unattainable, certainly in the medium term. It is an amount that you might be able to save over a decade or similar period. However, to obtain that amount to get a mortgage is really difficult. That is as may be, but there is an inconsistency affecting people who have to start again for some reason. Where a relationship breaks down and one partner has to leave the family home, which might have been purchased 15 years ago, for example, the person leaving the home, who has to set up again, still has to find a 20% deposit. Even though such people are not first-time buyers, there is a basis on which we should be saying they should qualify under the first-time buyer criteria. Equally, where only one member of a couple owns the one-bedroom apartment in which they live, the other member is denied the opportunity to be a first-time buyer if they decide to buy a family home together.

This may be a busy week for officials working in the Department of Finance but I suggest that as we consider the crisis facing young people buying homes in Ireland today, we should be flexible in applying the lending rules, where appropriate. Very often, there are people who cannot buy homes or afford to get a mortgage, with all the difficulties that come with that. Even though they are not technically regarded as first-time buyers under the criteria, they should still qualify. That they do not is a major obstacle for them. I ask the Department to consider the guidelines, work with the Central Bank and state that while first-time buyers are first-time buyers, there are other categories of people, including those who have to start again and those whose relationships may have broken down, who should also be considered. Someone in a relationship with a first-time buyer should not be discommoded by the status of that person.We should consider having some flexibility of those limits to allow greater access to the mortgage market for some buyers.