I propose to take Questions Nos. 134 and 135 together.
In Ireland's recent abnormal housing market, we have seen lending volumes decline dramatically. The banks are highlighting the lack of supply of houses in particular urban areas as a contributing factor for the lack of drawdown of approved mortgage facilities. I would look upon the development of this initiative as being an aid to encouraging and facilitating the supply of new homes particularly for young families.
In other jurisdictions, such as the UK and Canada, "mortgage insurance" markets have been developed to support bank mortgage lending, particularly to 'First Time Buyers'. Mortgage insurance allows banks to share the risk of mortgage lending, either with the public sector or with private sector insurance companies with the aim of increasing bank lending in general or to target groups.
My Department is committed, under 'Construction 2020 A Strategy for a Renewed Construction Sector', to examine the concept of a mortgage insurance scheme and how it might benefit new housing completions in the Irish market. The objective of any scheme would be to ensure adequate availability of mortgage finance on affordable terms for new completions, particularly for 'First Time Buyers', as the economy recovers. In doing so we would aim to provide the certainty needed to support greater levels of investment in new housing, with the associated benefits for the construction sector and ultimately for the consumer.
As the Construction Strategy mentions, my Department is undertaking an economic impact analysis which will assess the impact such a scheme would have on the Irish housing market, taking into consideration time limits, targeting 'First Time Buyers' or owner occupiers and focussing on new housing. I would like to assure the Deputy that the points he raised will be considered during the analysis process. The analysis will draw lessons from mortgage insurance initiatives undertaken in other countries and will include questions as to the appropriateness of a price cap as well as regional or geographic restrictions. Once this analysis has been completed and presented to me I will consider next steps.