Malcolm Noonan (Carlow-Kilkenny, Green Party) | Oireachtas source

I note that I am responding on behalf of the Minister for Finance, Deputy Donohoe. I thank the Senator for her comments regarding the Housing for All policy. It is certainly beginning to take hold and have a significant impact right across the country. The Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, the Minister of State, Deputy O'Donnell, and I are committed to ensuring we continue to deliver in 2023.

I will try to respond specifically on the question the Senator asked, the further information she provided and the additional outline she has just presented regarding the case of this young couple due to move into their newly-purchased home some time ago, but cannot do so because the house has tenants in situ protected by the ban on evictions. Arising from this, there is a risk that the interest rate on their offer of a fixed-rate mortgage will have increased before they are in a position to close on the house purchase. The Senator outlined some of the scenarios in this regard.

To give some context and background to this issue, it is important to bear in mind the emergency legislation enacted last year. The Residential Tenancies (Deferment of Termination Dates of Certain Tenancies) Act 2022 was signed into law on 29 October 2022.It deferred the termination dates of certain residential tenancies that fall or would fall during the winter emergency period, beginning on 30 October 2022 and ending on 31 March 2023. As the Senator said, it was the correct action to take as a short-term measure. The aim of the Act was to mitigate the risk that persons whose tenancies would otherwise be terminated during the winter would be unable to obtain alternative accommodation. Provision was also made in the Act for the deferral of the giving of effect to certain notices of termination where they have been served by a landlord on or before 29 October 2022 and specify a termination date that falls during the winter emergency period. Such terminations could take effect after the winter, in accordance with the Act, over the period from 1 April to 18 June 2023.

A deferral under this Act does not apply to a notice of termination served before or during the winter emergency period where the termination is grounded on the tenant’s failure to meet his or her obligations under section 16 of the Act of 2004, including his or her obligation to pay rent and not to engage in antisocial behaviour or where the landlord states that the reason for the termination is on the ground of a breach of tenant obligations, other than to pay rent, on the ground of a breach of a tenant’s obligation to pay rent, or on the ground that the accommodation no longer suits the tenant’s accommodation needs having regard to the number of bed spaces and size of the household. The Act was carefully calibrated to limit its interference with landlords’ constitutional property rights but it is accepted that some interference will arise for a limited time. This could include, as outlined by the Senator, issues relating to the sale or purchase of a property.

Since last July, the European Central Bank, ECB, has been increasing official interest rates. The ECB has an independent mandate to maintain price stability and is taking action to bring it down to its desired target of 2% over the medium term. As we know, interest rates are the main tool to combat inflation and the ECB has now increased its official interest rates five times since last summer. Over this relatively short period, its key lending rate has increased from zero to its current level of 3%. The increase in official interest rates feeds into the general level of interest rates throughout the economy. However, in a market economy, decisions on whether or not to provide credit, the amount of credit to provide or the interest rate to charge for such credit are all commercial decisions for individual lenders. Likewise, the length of time that a particular mortgage offer will last or the length of time a rate of interest associated with a mortgage offer, including a fixed rate, will last is also a commercial decision of the lender. Neither the Minister for Finance nor the Government has any role in such commercial decisions. However, I would ask that lenders, in their engagement with prospective borrowers who are indirectly affected by this legislation, be as flexible as possible and have regard to the individual situation of the borrower.