MORTGAGES:SENIOR BANKERS have made informal representations to Government that a change in stamp duty rules may help reinvigorate the property market, despite most bank chiefs stating publicly that the market must correct itself without any State intervention.
AIB, the biggest bank in the State, and Irish Life and Permanent, the largest mortgage lender, have said that no Government intervention would be required to bolster the €145 billion mortgage market, despite the value of new mortgages plummeting this year.
However, senior bankers have lobbied the Government privately to reform stamp duty further in a bid to increase activity in the property market.
The changes may involve a stamp duty holiday, abolition of the tax or an increase in the threshold similar to the change introduced on Tuesday in the UK.
"It won't be a cure but it would certainly help," said one banker.
A Department of Finance spokesman declined to comment.
The Government is likely to delay any changes until the new budget date on Tuesday, October 14th, to assist borrowers struggling to raise larger cash deposits.
By bringing forward the budget date, the Government can now announce a range of complementary measures to generate activity.
Previously, it would have had to announce a series of piecemeal changes in advance of the original budget date in December.
The value of new mortgages fell 16 per cent in the first half of the year, according to the latest statistics from the Irish Banking Federation (IBF) and PricewaterhouseCoopers released on Monday. New mortgages to first-time buyers fell 28 per cent in the first six months.
IBF chief executive Pat Farrell said on Monday: "It doesn't add up to a case at this point for any interventions in the market. The market is continuing to adjust."
First-time buyers are the main purchasers in the new home sector, where struggling builders are trying to sell properties to clear some of the oversupply.
Several proposals are being considered by senior civil servants, bankers and representatives of the construction sector to generate activity in the property market.
One measure being contemplated would involve the State's Housing Finance Agency providing an equity loan on new homes to help some first-time buyers on to the property ladder.
While the proposed scheme would help spur activity in the property sector, its aim would be to assist struggling buyers rather than bolster the mortgage market.
Another scheme would involve the State buying high-quality mortgages from the banks to generate liquidity so the banks could provide more new home loans.
