Sir, – Further to Gerard Howlin’s article “Mortgage interest relief is HAP for the wealthy” (Opinion & Analysis, May 10th), if housing weren’t so oppressively overpriced in the first place, then reconsidering mortgage interest relief wouldn’t even enter the equation.
But our Government has done almost nothing to lower the initial price of new housing, resulting in interest rate rises being even more painful.
What has the Government done about it?
To be fair, it has temporarily reduced development levies, but with no insistence that the cost reduction is taken off the selling price of the home. Instead, it will most likely be pocketed by the developer.
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What more effectively can the Government do?
An acre of agri-land costs about €15,000. Double or even treble that amount as compensation to €30,000 to €45,000 an acre and, depending on housing density, site cost could be as low as €2,000 to €3,000 per dwelling, resulting in much smaller mortgages.
Mortgage interest relief wouldn’t even need to be considered
Contrast that instead with the €100,000 per dwelling for, admittedly, a Dublin 15 site, mentioned recently in your property section.
In recent Irish Times property articles, site costs of €75,000 to €100,000 per dwelling were arising due to increasing costs due to speculation brought about by the flawed rezoning system.
All this cost is passed onto the unfortunate purchaser who ends with a much larger mortgage and more vulnerable to interest rises.
By ending the gravy train of speculation in land prices allowed by the rezoning system and instead opting for compulsory purchase orders of lands required for urban development, the Government can help to greatly reduce initial purchase price and vulnerability to interest rises.
While not every site has the very high plot costs mentioned above, a saving of even €20,000 to €30,000 on a site cost would be very welcome for home purchasers, along with also passing on the development levy costs to the home purchaser.
It makes no sense, to any reasoning person (except those profiting from it), to continue with the present rezoning system which adds massive artificial price hikes to housing.
It is of no benefit to the home purchaser, is destroying society and social cohesion, is driving skilled workers abroad, discouraging others from returning, and is likely to result in large electoral losses for the Government parties in the next election.
When a system is so broken that it is dysfunctional, it is time to change it, not tinker around the edges, as Government has been doing.
It is serious time for Government to look again at the structure of the housing industry and fundamentally reform it, starting with abolition of the rezoning system, nullifying the need to even talk about reintroducing mortgage interest relief. – Yours, etc,
DAVID DORAN,
Bagenalstown,
Co Carlow.