Tommy Broughan (Dublin Bay North, Independent)
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334. To ask the Minister for Finance the measures being taken to assist first time buyers into the housing market; if his Department has made a submission to the Central Bank to reform the macro prudential rule; and if he will make a statement on the matter. [26122/16]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, the new Programme for a Partnership Government (PfPG) provides for a range of measures which seeks to improve the supply of housing and to protect and promote home ownership.  In particular, it states that the Government will work with the Central Bank as part of its review of its mortgage lending limits to develop a new "Help to Buy" scheme to ensure availability of adequate, affordable mortgage finance or mortgage insurance for first time buyers as new housing output comes on stream. The Government is conscious that there is a supply shortage of housing and of the challenges faced by first-time buyers. Therefore, building upon the range of structural actions outlined in the Action Plan for Housing and Homelessness, I will also outline details of a new tax-based "Help-to-Buy" scheme in the forthcoming Budget in October. Full details of the incentive, including eligibility criteria and implementation method, will be provided on Budget day. Subject to the approval of the Oireachtas, eligibility for the scheme will be back-dated to take effect from the date of publication of the Action Plan for Housing and Homelessness (19 July).

As the Deputy will also be aware, the Central Bank has now commenced its review of the macro prudential regulations for residential mortgage lending. As part of this process, I can confirm that the Department has made a submission to the Central Bank and this is now available on the Department's website at the following link: . The Department's submission recognises the overall importance of macro prudential controls on the extension of credit for housing purposes but considers that it would be appropriate at this time to make some adjustment to the existing position; in particular, it asks the Central Bank to consider the adoption of a "capacity to pay" test (e.g. the payment capacity of potential purchasers based on rent paid over a five year period to be off set against the current deposit rules), an increase in the allowance for lending for PDHs in excess of the LTV and LTI caps to 20% and 25% respectively and that the first time buyer LTV limit of 90 per cent be applicable to the first €320,000 value of a property. It is also the recommendation of the Department that the above adapted measures be directed primarily towards first time buyers.

The Central Bank has advised that its review of the impact and effectiveness of the measures is due to be completed by the end of November and that all submissions to the call for evidence will be published in due course.