DUBLIN: The Central Bank has initiated proceedings to conduct an urgent review of mortgage lending policy and rules in Ireland. In addition, measures to promote financial stability and prevent a future banking crisis were put in place. Tánaiste Leo Varadkar told Dáil that he had asked the Central Bank to complete the review of mortgage rules as soon as possible.
Speaking in the Dáil, Mr. Varadkar also said that the Government was intensifying its efforts for new and up-to-date changes in the housing sector. In response to harsh criticism leveled by a Sinn Fein housing spokesman against the Government’s and Fine Gael’s housing policy, the Tanaiste said that strong action will be taken to address the housing crisis.
Varadkar said a public consultation was essential as part of the review. The Government cannot afford not to listen to the voices of those caught in the rental trap. Many people pay €1,800 or more in rent but are unable to obtain a mortgage, which is hard to accept, the Tánaiste said.
Central Bank officials say Ireland can learn from the experiences of other countries. The Central Bank has said the Government should examine whether the current system is the most appropriate, and that it is eager to hear from the public.
Sinn Fein attacks Fine Gael
All of the discussions at Dáil focused on the housing crisis. Sinn Fein’s housing spokesman Eoin O Broin said Fine Gael’s legacy is a country with “sky-high rents” and “spiralling high prices”.
He also cited figures from the Central Statistics Office (CSO), which found that one-third of tenants in the country believe they will never own a home. “These are the casualties of 10 years of Fine Gael’s housing policy,” O Broin said.
When Varadkar joined the cabinet in 2011, the average price of a new home in Dublin was €318,000, and today it is €503,000. House prices soared by 88% across the country and 95% in Dublin over this period.
“In 2011, the average cost of renting across the state was €781 per month. Today, the average cost is 1,256, that’s an extra €6,000 a year on rent. In Dublin, the situation is even worse. Average rents have increased from €960 per month to €1,745,” the Sinn Fein housing spokesman said.
When Varadkar took over as party leader, he promised to represent the working class. But the only category that the government represents are big developers and big landowners. “I have to say it’s become increasingly clear that Fine Gael is not the party of hard-working people. It is a party of privilege, and a party of ever rising housing costs,” O Broin alleged.
Tánaiste defended his party’s stance
Varadkar denied the allegations and justified his party’s stance on housing. The housing budget and the budget for social housing are currently being actively considered. Varadkar also revealed that he wants to increase the housing budget.
He claimed that his party’s policies had resulted in 65% of Irish people owning their own home. “It’s because of policies and decisions made by my party and the Fianna Fail party and Labour and Greens and others in years gone by,” Varadkar added.
“I know that’s not a reality for hundreds of thousands of people in the State, for whom home ownership is a dream, a distant possibility, and that has to change.
“The Government gets that too and that’s why we’ve taken actions in order to help people buy their first home, for example the Help to Buy programme, which has helped tens of thousands of people to get a deposit to buy a home, something opposed by Sinn Fein,” the Tanaiste explained.
According to Varadkar, the main solution to the housing crisis is increased availability of all forms of housing.
Expected changes
There are likely to be a number of changes in the housing sector even before the next budget. Housing prices in the country are skyrocketing as in the Celtic Tiger era.
The major change that may come before the next budget may be the decision to allow more mortgages. Opposition parties alleged that the Government and the Central Bank were attempting to sell new properties at higher prices.
Varadkar also hints that more affordable homes will be available in the market. The decision to increase the share of affordable housing in existing housing developments from 10% to 20% could be made soon.
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