Róisín Shortall (Dublin North West, Social Democrats) | Oireachtas source

I thank Sinn Féin for bringing forward this motion at a time when so many families are struggling to survive. They are trying to cope with the high cost of housing, the ongoing situation regarding inflation and pressures on family budgets at a time when interest rates continue to rise. All of this combines to place a heavy burden on many mortgage holders and first-time buyers. Unfortunately, the situation has only gotten worse since we last debated this proposal in February. Squeezed workers and families are struggling to absorb these huge interest rate hikes, not least in the context of the cost-of-living crisis, as I said.

Notwithstanding the real challenges facing mortgage holders, there is a need for a debate on what is the most effective and fairest way to intervene. I understand the desire to intervene directly by assisting those hardest hit but I am not convinced that this is the fairest or most effective way. In February, I outlined some concerns I had based on our very chequered history with mortgage interest relief. My overarching difficulty with the principle of mortgage interest relief remains the same, that it is a measure targeted at the upper end of income distribution. People who manage to get a mortgage are by and large in a better situation than most of their peers. Indeed, they are in a better situation than a great number of young people who now can no longer aspire to the whole principle of home ownership. The figures in respect of home ownership show clearly how they have collapsed in recent years. We must then ask if those who are better off, with better-paid jobs, are the only category who can aspire to home ownership and can get a mortgage. To get a mortgage for an average house in the Dublin area, you need a family income of approximately €120,000, way above two people on average incomes. While I am not saying that people in that category are wealthy, there is a large cohort of other people who cannot aspire to that in circumstances in which they continue to live in their parents' homes in their twenties and thirties or are renting and paying exceptionally high rents. Where is the support most needed? How is that support going to be provided to people? We must always observe the principle of both fairness and effectiveness in taking any measure which intervenes in the housing market.

In view of this, mortgage interest relief is typically considered a regressive measure because it amounts to transferring public funds, including from people with low incomes, to those who can manage to get a mortgage, which is quite an exclusive group of people in this day and age. It is a terrible reflection on this Government and the last, but it is the reality. People who are relatively better off are the only people who can now afford to get a mortgage. That is not to say we should do nothing because we cannot rely on the market to address these issues. However, our interventions must be designed specifically to drive down the costs of housing, not potentially or inadvertently fuel it. The need to drive down the cost of housing has never been recognised either by this or the last Government. The view has always been that this is about supply and if there is sufficient supply, then prices will go down. That does not necessarily follow. The rules of supply and demand do not apply to house prices because the other factor is the cost of land. At no point, certainly in recent history, has there been any serious attempt to address the issues of the high cost and high price of land. Essentially, developers control the supply of land, which they do in a way that maintains house prices at such an unaffordable level.

Any intervention must be very targeted and specific. I hear what people are saying about the time limit, which is to last until the end of the year but I have not heard anybody talk about what level of targeting, if any, would apply to placing limits on people's income, house prices or the size of the mortgage. Those are all factors which are important if there is to be an intervention like this and if it is to pass the fairness test. The Social Democrats has proposed several measures to drive down the cost of houses. We must use the very extensive public land banks that exist.

We know from, for example, Ó Cualann that it is possible to build a house at a build cost that is very substantially lower than the actual market price. That difference not only relates to developers' profit margins but also amounts very often to the cost of land. That is why it is critical the Government maximises the provision of housing on public lands. In that way the Government can achieve much cheaper prices for houses and, of course, a substantial increase in supply.

Another thing the Social Democrats have been talking about is that it is fine to say there is a lot of housing in the pipeline - probably not enough - but that takes time. There is no doubt that by far the fastest way of increasing the supply of housing is through dealing effectively with the large number of vacant homes. I have said already that the new tax that has been introduced is really not a serious tax. Ultimately, the Government needs to rethink radically its approach to the housing crisis and play a much more active role in delivering housing. The idea of more incentives for developers such as waiving development levies is certainly not the way to go. Those types of policies will not and cannot deal with the dysfunction in the housing market. In fact, they add to that dysfunction. The approach the Government has taken in most cases is to subsidise what are already unacceptably high house prices. That is the key thing. The aim has to be to drive down the cost of housing, not to subsidise already overvalued house prices. Unless the State steps in, this Government will continue to fail utterly to get to grips with the housing crisis.

Returning to the specifics of the motion, it is my view that the call on the Central Bank to enhance the supervision of vulture funds in the interests of struggling borrowers deserves much greater discussion. I fully support this aspect of the motion as the Central Bank has a key role in protecting mortgage consumers. In my view, however, it is completely failing to do so. New analysis by Moneysherpa, based on recent data released by the Central Bank, estimates that around 85,000 mortgage holders are currently customers of vulture funds. The majority of those customers, around 69,000, are paying mortgage rates of more than 4% on average, while an estimated 38,000 are on average variable rates of 5.57%. Tackling that rip-off that is going on in respect of mortgage rates has to be the priority. The Government has opened the gates and put down the red carpet for vulture funds, and it is again tolerating a situation in which people are being screwed over because of the lack of regulation in this area.

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