Sir, – Further to "Noonan wants review of first-time mortgage cap", Front Page, September 18th), if the Minister for Finance was serious about helping people get on the property ladder and tackling bank collusion, he would address the issue of banks requiring a deposit before they approve lending. That requirement is an outdated throwback to a time when one man's income (and it was always a man as women weren't allowed to have a mortgage unless a man was guarantor) was sufficient to support a family.
If a person or couple are renting an apartment for €1,500 per month and are able to afford this and their bills and have a track record of payment, then why shouldn’t they be able to apply for and receive a mortgage that matches to a monthly payment of €1,500? Instead we have the nonsense of parents “loaning” deposits to their children to pretend they can save a deposit. It is a nonsense to argue that the point of a deposit is that it gives people equity in their home and it shows they can save. Certainly if people did not have to pay so much for childcare or travel costs, costs which could be reduced if the Government took action rather than being led by the market, they could save more, but the reality is that they do have childcare and transport costs.
In addition, I have never yet heard of a bank allowing a consumer to use up some of their equity if they find themselves unable to pay their mortgage. So even if they have some equity, all that would happen if they fall behind on their mortgage would be that eventually, the house would be repossessed and sold for an amount that covered the outstanding debt to the bank. The bank wouldn’t care a fig about any equity being returned to the homeowner. So much for all the effort to save that deposit.
Fine Gael is making noises about how it will help people seeking to buy a home, despite the fact it has been in office since 2011 and could have helped them at any point over the last five years. So even if Mr Noonan made the case for the homeowner to the banks, which he won’t, there is no evidence he has the guts to use his power as Minister for Finance to make the banking sector change if it won’t do so voluntarily. He hasn’t shown any indication of doing so since he took office nor any desire to want to upset those in the golden circle who get direct access to the corridors of power. – Yours, etc,
DESMOND FitzGERALD,
Canary Wharf,
London.