Labour calls for €130k houses

Reacting to a new government initiative to guarantee low-cost mortgages for buyers at a fixed rate of just 2%, Mr Howlin said instead there were more than 700 state land banks which should be used for housing.

The cost of new homes should also be reduced to as low as €130,000, if those lands were made available for development, he said. The law might need to be changed to cap the profit on building homes, the Wexford TD even suggested.

“The old metric was three-and-a-half times the average wage of the person looking for the mortgage. If the average wage was in the order of €37,000 to €38,000, we should be looking to provide houses — obviously at the lower end — at three-and-a-half times that.

"That can be achieved if we can control land prices in particular. It is something we have argued very trenchantly for.

“Obviously in the longer term, we may need to change the law so that people won’t be making windfall profits. But the notion before you labour a block on a house that you have already costed €150,000 or €200,000 is not acceptable and we need to break that cycle.”

Housing spokeswoman Jan O’Sullivan warned that the revamped government mortgage scheme for first-time buyers could actually hike up prices.

“There’s a danger as well that prices will go up because there is a certain amount of money there to buy houses and we have seen that before, it might not benefit the people it is designed to benefit.”

Problems in housing, health and education were discussed by TDs and senators at the special meeting, which was also addressed by Threshold CEO John-Mark McCafferty.

Candidates have been selected in 20 constituencies so far to contest the next general election. Another 12 have yet to be decided on.

Asked about his leadership of Labour, Mr Howlin said the party was “united”.

“As far as we are concerned, the Labour party today in all our work is to rebuild a strong social democratic party.”