Sir, – The new mortgage rules proposed by the Central Bank should help to prevent future house price bubbles and will, over time, prove beneficial to buyers.
A major risk, however, is that it may also prove to be a disincentive to builders and developers to supply new houses to the market, thus forcing ever more people into an already overheated rental market in major urban centres.
Perhaps this is the opportune time for the Government and local authorities to launch a major building programme to supply long-term rental accommodation to the working middle classes in our cities.
This accommodation would be available at market rents, with long-term tenancies available but without a right to purchase for tenants. Rents would be guaranteed to rise by no more than inflation and might be fixed for longer-term leases.
Such developments would provide alternative, secure long-term accommodation, while delivering a reasonable rate of return for the public monies invested and help to take some of the heat out of the private rental sector. – Yours, etc,
PETER MOLLOY,
Glenageary,
Co Dublin.
Sir, – The Central Bank’s new mortgage lending cap should have the desired effect of slowing down the rate of house price increases. This means that people in negative equity face the prospect of a now much longer wait before being able to sell homes and apartments that their families have outgrown.
While this is undoubtedly a sensible long-term move, it means that one generation of house buyers will now make a huge sacrifice for the good of future generations. In the interest of fairness, something has to be done for this group. Basing the property tax on the equity owned, rather than on the value of the property, would be a start. – Yours, etc,
MICK FLYNN,
Waterford.
Sir, – The people who bought from 2003 to 2008 will be most affected by the mortgage lending changes. People who, despite a deep recession, didn’t walk away from their debts and continued to pay their mortgages, when developers were washing their hands of their debts. I am one of these people and after seven years there was light at the end of the tunnel. I was about to hit parity on what I owed versus what I would get for my house and I had saved up my 10 per cent deposit. I had bought my house back in 2006 because I was approaching 30 and wanted to settle down.
I had been paying rent for about 10 years and I was in the financial position to buy. I bought a house that was within my means; in fact, I borrowed over €100,000 less than what was available.
I had to move but I couldn’t sell my house, not with the massive negative equity. I decided to keep paying in the hope that down the line I could finally sell and move on with my life. These changes have essentially put me and many others back years.
It is an extremely hard pill to swallow when I think that I could have just walked away and claimed insolvency and would be in a much better position that I am now. Could you imagine how bad our current financial situation would be if everybody who was burdened with negative equity walked away from their debts? We didn’t and this is how we are treated.
I cannot fathom how a first-time buyer is considered a lesser risk than somebody who has demonstrated the willingness and ability to pay during the recession we have endured.
All I ask is that our generation is considered before these changes are implemented. Surely there can be a caveat added to allow people who bought from 2003 onwards the same requirements as first-time buyers? – Yours, etc,
IAN STEWART,
Portlaoise, Co Laois.
Sir, – Eugene Tannam (January 29th) fails to see that if buyers are no longer able to afford property at the current prices, prices will inevitably fall. People who call the measures “penal” are unwittingly advocating for higher property price. Although it seems anathema to the Irish psyche, lower prices will put home ownership within reach of more people without massive mortgage debt and can only be good for our economy and especially our competitiveness. – Yours, etc,
ALEX FRENCH,
Booterstown,
Co Dublin.