I am not going to play the blame game. I want to help by coming up with solutions to help young families to get homes. Today I want to raise the very important issue of mortgage affordability, particularly for first-time buyers. As we all know, this country is in the middle of a housing crisis and while it is true that the main issue is the supply of affordable housing, another issue that can be addressed immediately is the very restrictive lending rules imposed by the Central Bank.

In my home town of Dundalk the rental price for a three-bedroom family home ranges from €1,300 to €1,800 per month. When for sale, those same houses are generally on the market for between €200,000 to €270,000. A quick calculation indicates that the average monthly mortgage repayment for these homes would be between €900 and €1,200. Under the current Central Bank rules, a young family is expected to save approximately €2,000 per month towards a deposit as well as pay rent of up to €1,800 per month. The Tánaiste will agree that this is not realistic. If a young family can afford to and can demonstrate that they are paying rent at a higher level than a comparable mortgage, it is clear that they can afford such a mortgage. A simple solution is to amend the rules to allow first-time buyers to include the rent paid for a period of three years as a virtual deposit on their mortgage application. This would clearly demonstrate their ability to repay a mortgage and remove the draconian rules which mean they have to save for a deposit while also paying ridiculously high rents. It does not add up and it does not make sense.

The figures for my home town of Dundalk show that a young family hoping to purchase their first home would have to save an average of €2,000 per month while paying rent of approximately €1,500 per month, a total of €3,500 per month. This means that the family would need a gross income of approximately €5,500 per month, or a gross annual salary of €66,000, just to pay their monthly rent and save for a deposit. This does not take account of other outgoings like food, utility and medical bills. It is clear that this is not a realistic situation for young first-time buyers in Ireland. At this rate they will be condemned to a lifetime of paying high rents, most likely to vulture funds. The Government must act now to deal with this very serious issue. People should be able to buy their first home but to earn €66,000 means, in many cases, two people working.

The Government is looking for solutions to the housing crisis and I am not here to play a blame game. Will the Government consider my suggestion regarding a virtual deposit?

The Deputy made some very good points in his remarks. As the House will be aware, the objective of the Central Bank macro prudential mortgage lending rules is to mitigate systemic risk and promote financial stability, to increase the resilience of the banking sector and households to the property market and to reduce the risk of credit spirals from developing in future. They are there to avoid a boom and bust in home values, people ending up in negative equity and a future banking crisis. They are there to prevent the mistakes of the past being repeated.

However, we must make sure that we are not fighting the last war when it comes to mortgages. The mortgage rules have very much helped to keep a lid on house price inflation, which is a good thing but they have also driven up rents, which is not a good thing. Like Deputy Fitzpatrick, I would know and would have been contacted by many people who are paying very high rents of between €1,600 and €1,800 per month. They are struggling but are managing to pay them and yet they cannot get a mortgage of €1,500 per month. They cannot get a mortgage for a lower amount than they are currently spending on rent and they find that difficult to accept and so do I. With this in mind, the Central Bank has indicated that it will carry out an in-depth review of lending rules over the course of this year and into next year. I would encourage the bank to expedite that review and the public consultation that it intends to carry out, through which it will hear the voices of people who are caught in the rent trap in this way, paying higher rents than they would pay if they were able to get a mortgage they could afford.

In assessing a borrower's ability to repay a mortgage, lenders can and do take account of applicants' existing financial commitments, including their rental payments. However, there is a significant difference between a rental contract and a mortgage contract to purchase a home and this must be borne in mind. A house purchase and associated mortgage contract usually has a more long-term character than a rental contract which leaves the house purchaser or mortgage borrower more exposed if there is a future shock to his or her income, house prices or interest rate, for a longer period.

The Central Bank mortgage macro prudential measures apply certain loan to value and loan to income restrictions to residential mortgage lending by financial institutions. In general, the maximum mortgage limits are 3.5 times the borrower's income and for first-time buyers, 90% of the value of the residential property. For second and subsequent buyers, the maximum mortgage limits are 3.5 times the borrower's income and 80% of the value of the home. However, banks have some flexibility at their discretion to provide mortgage loans in excess of the specified regulatory limits but it is a commercial matter for lenders as to whether they avail of this discretion. For example, up to 5% of lending to first-time buyers can be above the 90% threshold and up to 20% of lending to second-time borrowers can exceed the 80% threshold. Furthermore, up to 20% of lending to first-time buyers can exceed the 3.5 times income limit.

All we will be doing this year and next is passing the buck. These young people need hope. There are houses for sale in my home town of Dundalk for between €200,000 and €270,000. These people are working hard and are putting their whole lives on hold to try to get a family home. I am not going to be like Sinn Féin and engage in a blame game over this. The Government has asked for solutions and I am suggesting one. I want this Government to commit to helping these families to get a home. These young families are coming to my constituency office on a regular basis. They are working morning, noon and night and doing shift work. These are working class people who get up early in the morning to go to work and they need help. What am I to say to them? Am I to tell them "No"? They can afford to pay their rent but they cannot afford to also gather the money for a deposit. They can show that they could pay back a mortgage. I am seeking a commitment from this Government.

I ask it to sit down with the Central Bank and put a bit of pressure on it. These people are stuck in the middle. They cannot get on the council list because they earn too much. Realistically, they are going for houses that a lot of work has to be done on. It is their families, friends and relations who will give them a hand with that work. They want something to start with. I ask the Tánaiste not to tell me that something will happen next year or the year after. I am looking for a commitment that the Government will consider this virtual deposit to help these families get the deposit and get on the ladder for the first time.

I hear the Deputy and I am sympathetic with what he has to say. As I said earlier, many people are paying €1,800 or €2,000 in rent per month. They could afford a mortgage of €1,500 and would be better off if they could get that mortgage but they cannot do so. I hear what the Deputy is saying and I hear that from people all of the time but I am not passing the buck in saying that the Central Bank is independent. It is independent and for good reasons. It sets interest rates independently of the political process and it puts macroprudential rules in place to avoid a repeat of the mistakes of the past, including the creation of a housing bubble, which all of us in this House want to avoid.

The Central Bank has regular engagement with the Minister for Finance and the Government. I met the Governor of the Central Bank about this matter some years ago in my previous role as Taoiseach. It is now carrying out a review of the mortgage rules. I am asking it to do that expeditiously, properly and well, but also to do so as quickly as possible. It is welcome that the Central Bank is having a public consultation. I hope that people who are trapped in this situation will take part in the public consultation and that the Central Bank will hear the voice of people in that regard. It has a major role to play in ensuring financial stability and in making sure we do not repeat the mistakes of the past. However, it cannot be blind either to the unintended consequences, which may be rents going as high they have gone and people feeling that they will never be able to buy a home of their own.