Willie Penrose (Longford-Westmeath, Labour)
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Question 87: To ask the Tánaiste and Minister for Finance his views on the prospect that first-time buyers will be excluded from the housing market if interest rates increase as forecast to 4.75% in 2007, causing first-time mortgage limits to fall substantially; and if he will make a statement on the matter. [17170/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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At the outset, I would like to remind the Deputy that it is not appropriate for me to speculate on the likely path of interest rates, as these are set by the ECB which is independent. That said, I do not consider that potential first time buyers are facing exclusion from the housing market.

There are several reasons why this is the case. The first is that mortgage interest relief was doubled in the 2007 Budget. Furthermore, the new Programme for Government contains a commitment to increase in Budget 2008 the ceiling on mortgage interest relief for first time buyers, from €8,000 to €10,000 for single people and from €16,000 to €20,000 for couples and widowed persons and to keep the rate of relief at 20%. In addition, this Government has published a Bill which will abolish stamp duty for all first time buyers.

Finally, the available evidence indicates that house prices are easing. This, allied with rising incomes in the economy as a whole, should increase affordability for first time buyers.