Skip to main content

Bank Rate Rises Risk Increase In Homeless...

BANKS RISK making people homeless and adding further vacant houses to an already struggling property market if they raise mortgage interest rates too much, Minister of State for Housing Michael Finneran has warned.

He has urged a new government to use its influence with the banks to ensure families do not lose their homes as a result of aggressive interest rate increases.

“I am appealing to the banks . . . It would be a terrible, unfortunate thing that we have vacant properties all around this country and we created more vacant properties because people were not able to make repayments. That would be a scandal, and should not be allowed,” said Mr Finneran yesterday at the launch of a new service for homeless people.

He said many families were now at the “pin of their collar” and there was a certain level at which they would not be able to make repayments on their homes.

He said the number of family homes repossessed in the recession was still very low due to the leniency of the courts and action already taken by the Government. But he warned noises from the ECB about future interest rate increases and recent rises by Irish lenders were a cause of concern.

Last week Permanent TSB introduced immediate increases of between 2 and 3 per cent on its fixed interest rates. Most banks have also increased variable interest rates over the past year.

Mr Finneran said the banks face commercial pressures caused by a gap between the rates they are charged to raise money and the rates they charge customers. He said the Government could intervene to protect homeowners.

“Is the State capable? Does it have the resources itself to bridge the [funding] gap? I think this is one area that should get a priority,” he said.

Mr Finneran urged a new government to continue, modify and vary the recommendations of the expert group on mortgage arrears and personal debt, which he oversaw, to suit the conditions.

More than 600 orders for possession, which allow a lender to repossess property when a borrower falls behind with mortgage repayments, were granted in the courts last year.

At the launch of a new Dublin outreach service for homeless people, Focus Ireland chief executive Joyce Loughnan said its services were seeing a lot more people presenting with mortgage arrears.

She said Focus Ireland provided advice aimed at helping people to hold on to their homes and link in to entitlements. She said it was the Government’s call on how to deal with the problem of home repossession.

“They have put all this investment into the banks and that is all public money. The public now has to get some return from that. There has to be a social benefit . . . It’s much cheaper for the Government to subsidise someone keeping their home than have someone falling into homelessness,” said Ms Loughnan.

Mr Finneran, who is not standing in the election, said he was disappointed the Government had not achieved its target of eliminating long-term homelessness by the end of 2010. He said it should be possible for an incoming government to find suitable housing for the 400 long-term homeless within six months due to the new structures in place.


Report by JAMIE SMYTH - Irish Times

Popular posts from this blog

Ireland's Celtic Tiger Excesses...

'Bang twins' may never get to run a business again... POST-boom Ireland is awash with cautionary tales of Celtic Tiger excesses, as a rattle around the carcasses of fallen property developers and entrepreneurs will show. Few can compete with the so-called Bang twins for youth, glamour and tasteful extravagance. Simon and Christian Stokes, the 35-year-old identical twins behind Bang Cafe and exclusive private members club, Residence, saw their entire business go bust with debts of €9m, €3m of which is owed to the tax man. The debt may be in the ha'penny place compared with the eye-watering billions owed by some of their former customers. But their fall has been arguably steeper and more damning than some of the country's richest tycoons. Last week, further humiliation was heaped on them with revelations that even as their businesses were going under, the twins spent €146,000 of company money in 18 months on designer shopping sprees, five star holidays and sumptu

Property Tycoon's Dolce Vita Ends...

Tycoon's dolce vita ends as art seized... THE Dublin city sheriff has seized an art collection and other valuables from the Ailesbury Road home of fallen property developer Bernard McNamara. The collection will be sold to help pay his debts. The sheriff, Brendan Walsh, is believed to have moved against the property developer within the past fortnight, calling to his salubrious Dublin 4 home acting on a court order to seize anything of value from his home to reimburse his creditors. The sheriff is believed to have taken paintings from the family home along with a small number of other items. The development marks a new low for Mr McNamara, once one of Ireland's richest men but who now owes €1.5bn . The property developer and former county councillor from Clare turned the building firm founded by his father Michael into one of the biggest in Ireland. He is the highest-profile former tycoon to date to be targeted by bailiffs, signalling just how far some of Ireland's billionai

I fear a very different kind of property crash

While 80% of people over 40 own their own home just a third of adults under 40 do. This is disastrous for social solidarity and cohesion Changing this system of policymaking requires a government to act in a way that may be uncomfortable for some. Governments have a horizon of no more than five years, and the housing issue requires long-term planning. The Department of Public Expenditure and Reform was intended to tackle some of these problems. According to its website its remit is to “drive the delivery of better public services, living standards and infrastructure for the people of Ireland by enhancing governance, building capacity and delivering effectively”. So how is the challenge of delivering homes for people in 2024 and beyond going to be met? The extent of the problem is visible in the move by companies, including Ryanair, to buy properties to house staff. Ryanair has, justifiably, defended its right to do so. IPAV has long articulated its views on how to improve supply an