Fiona O'Loughlin (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Minister of State, Deputy Noonan, for making himself available to take this Commencement matter. The Minister of State will be aware that I regularly raise issues facing people in my own area of south Kildare, a place which the Minister of State is very familiar with, in regard to accessing housing and, of course, the rental market within our communities.

My office regularly deals with complex and difficult housing situations, and I know this is no different for the Minister of State or for other Members of this House. I am confident, however, that Housing for All is having, and will continue to have, a meaningful impact on the housing market in south Kildare and, indeed, across the country.

When we look at supply and at the increase in 2022, when 29,851 homes were completed, this is an increase of 45.2% on 2021 and 41.3% on 2019, which was prior to the pandemic. This is always important to note.

Obviously, the Government is driving significant reforms. I am aware the Minister, Deputy O’Brien, recently published the draft planning and development Bill which will bring greater clarity, and consistency and certainty to how planning decisions are made.That is very important. A record €4.5 billion in State housing investment will be available in 2023 to directly build social and affordable homes. Additionally, the Government is making progress in tackling vacancy and dereliction. This is again very important. In my area, I have seen the heightened focus of my local authority in tackling dereliction and in using the Derelict Sites Act to register and effectively force owners to maintain and develop their properties. I thank, in particular, Mr. Joe Boland, a director with Kildare County Council for his help with this matter. This undertaking has a positive impact in ensuring we do not have antisocial behaviour in these areas.

There is no doubt, then, that we are taking decisive and significant strides to better provide for our citizens in this sphere. We are all aware, however, of the somewhat unforeseen impacts of the ban on no-fault evictions. I believe this ban is the correct intervention and it makes sense to protect those tenants due to face the open rental market, many of whom would have been deemed at risk of homelessness as a result of a decade of undersupply. Many people, though, can and are accessing the property market and are able to purchase a home. I refer to young people who have had to make huge personal sacrifices. They have moved back in with their families and returned to their childhood bedrooms to save and set themselves up financially to purchase their first homes in a very difficult market. These people have worked incredibly hard to get to a point where they can purchase a house but many are struggling to secure their properties because of this eviction ban.

One case I am dealing with, which prompted me to table this Commencement matter, concerns a couple from my village of Rathangan. They reached out to me earlier in the year looking for guidance on how to deal with their mortgage lender. This couple had gone sale agreed on a property in the village, which is currently rented, and the tenants are waiting on their new-build home to be completed. As a result of the ban on evictions, the tenants will remain in the property until at least 1 April 2023. Initially, this couple were meant to close the sale on 6 January 2023, but this has not happened and this has left them in a very difficult situation. Not drawing down the mortgage funds by 13 February 2023 would see the fixed interest rate increase from 3.1% to 3.9%. This amounts to an extra €110 in repayments. If the mortgage has still not been drawn down by 13 April 2023, the interest rate will then go up again to 4.4%. This couple's deposit is fully paid but their inability to secure the property means their interest rate continues to increase, through no fault of their own.

The tenants have every right to remain in that property. The frustration felt by this couple does not stem from those tenants in situbut from the situation they have found themselves in. Of course, I engaged with the lender. I was informed that nothing could be done and the institution was not in a position to extend the fixed interest rate. It means this couple, and countless others, I am sure, remain in limbo. They finally achieved their dream of purchasing their own house but cannot realise it. All the while, the cost of doing so continues to increase due to no fault of their own. What is the Department of Finance doing to help protect these buyers, many of whom are young, first-time purchasers who simply cannot afford these increases at this stage of their lives?

Malcolm Noonan (Carlow-Kilkenny, Green Party)
Link to this: Individually | In context | 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.

Fiona O'Loughlin (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Minister of State for his response. I am afraid it is not going to bring any comfort to the couple I am engaging with or, indeed, anybody in that situation. I fully understand the rationale for the eviction ban. It was the right decision at the time. However, I do not think first-time buyers or even the landlords themselves were considered when implementing that ban. Due to that eviction ban, hardworking people have been penalised from the get-go as those who were ready to make a closure have not been able to move into their homes. Tenants have been covered by the ban but purchasers are not. I honestly believe people in that position need to have some sort of protection. It is not their fault and yet they are being penalised. I am talking about those who are living at home with their parents, those who are living in a mobile home and those who are paying rent. Mortgage interest rates will be going up, in this case by over €300. I understand the Government does not have a role in such commercial decisions but I plead with the Minister for Finance to send a message to the banks. I want the Minister of State to bring this back to him. To be fair, I know of one situation where the lender is honouring a commitment made last year but many of them are not. We need to be very firm on this.

Malcolm Noonan (Carlow-Kilkenny, Green Party)
Link to this: Individually | In context | Oireachtas source

I again point out that as the independent regulator, the Central Bank has indicated on many occasions that it expects all regulated firms to take a consumer-focused approach and to act in the consumer's best interests at all times.Last November the Central Bank wrote to all regulated entities to make clear to them that the firms are required to address potential risks arising from a changing operational and economic landscape and to ensure they have consumer service capacity and structures in place to meet expected service levels and provide a timely and customer-focused service through all channels. If consumers are not satisfied with how a regulated firm is dealing with them in the handling of their mortgage, or they believe a regulated firm is not following the requirements of the Central Bank's codes, regulations or other financial services law, they should make a complaint directly to that regulated firm.

The Minister has quite clearly stated that he would ask lenders to engage in a positive way with prospective borrowers. Senator O'Loughlin has stated that other lenders are offering flexibility. This is the thrust of the message the Minister is putting out to the lenders. I want to pass on this message.