Sir, – It is bizarre to hear all the whingeing and moaning from the home-owning class, be they resident homeowners or buy-to-let investors. They all seem to forget that they have a capital asset that even with a massive economic downturn will still be worth more at the end of the mortgage term, even after a modest capital gains tax bill for some, than they could ever afford to have saved if they were aiming for a similar lump sum based on a monthly contribution into a savings plan.
Why is it in Ireland the default response to pandering to whatever well-heeled section of society Fine Gael is courting is to offer a direct tax subsidy that becomes a burden on the current account? Each euro paid as a grant to people buying a house is one less euro for spending on services people make such claims about wanting.
If the Government is serious about helping proper first-time buyers – people who have never owned a home and don’t have a silver spoon from their family or parents – then it can mandate the Central Bank to end the ridiculous expectation for a deposit.
The only requirement buyers should need to meet is an ability to pay the mortgage they are asking for, whether they have a deposit or not.
I’m not aware of a single homeowner who had their house repossessed and was given back the deposit, or a lump sum after the bank fire sale, to enable them rebuild their life.
The argument that a deposit gave the homeowner an initial buffer zone that could help them later on if they ever got into difficulty was always nonsense and remains so. If you set up a mortgage and for whatever reason you find yourself unable to pay, the fact you had a 10 per cent or 20 per cent deposit will be of no benefit to you because the bank will sell the house for enough to clear its loan and any equity you had will be lost. Having had a deposit provides no protection to you.
If Minister for Housing Simon Coveney is serious about increasing lending liquidity, then he would step away from the nonsense of creating more paperwork to administer a direct transfer of wealth from the taxpayer to the middle class and instead he would focus on mortgage lending rules. The notion that a bank can’t properly assess the affordability of an application for a 100 per cent or even a 110 per cent mortgage beggars believe. If a person is paying €1,500 rent and has a record of doing so, then they can afford a €1,500 mortgage.
It’s that simple, but the Central Bank provides cover to banks who are protecting the vested interest of a small number of property speculators who used to have Fianna Fáil at their beck and call but now have Fine Gael to do their bidding. – Yours, etc,
DESMOND FItzGERALD ,
Canary Wharf,
London.