Irish Mortgage Market Crisis Deepens

May 30, 2012 Updated: October 1, 2015
A house for sale pictured in Dublin, on July 20, 2009.
A house for sale pictured in Dublin, on July 20, 2009. (MIGUEL RIOPA/AFP/Getty Images)

Latest figures on mortgage arrears indicate a grave crisis in the housing market, according to Threshold, the national housing charity. 

The figures, published last week, show that 10.2 per cent of residential mortgages are now over 90 days in arrears, up from 9.2 per cent at the end of 2011. Furthermore, the number of mortgages over 180 days in arrears has increased during that time span by about one per cent: from 6.9 per cent in 2011 to the current 7.8 per cent.

.”This is the fourth year in which mortgage arrears have been increasing,” said the Director of Threshold, Bob Jordan. He said that this indicates a crisis in need of immediate government attention: “The crisis in our housing market is worsening and, yet, the Government continues to delay over implementing effective policies to help the situation.”

“Taking into account the Keane Report and the Personal Insolvency Bill, a strategy is being developed to deal with arrears in residential mortgages. But progress has been slow, and the Personal Insolvency Bill needs to be published and enacted as soon as possible,” he said.

Mr Jordan also called for independent advice to be made available for homeowners in need who have to interact with financial institutions. He demanded that those independent advisors should be experienced in the fields of law and finance, and that there should be enough advisors to ensure that every homeowner in need may avail of such services. 

“The Government must act immediately to implement measures such as these. Otherwise, the crisis with residential mortgage arrears will just continue to get worse,” said Mr Jordan

Buy-to-let Sector Even Worse Off 

In addition to highlighting the crisis in relation to residential mortgage arrears, Threshold warned that the situation in the buy-to-let market is also extremely grave.

According to the Chairperson of Threshold, Ms Aideen Hayden, the arrears rates for buy-to-let mortgages are even worse than those for residential mortgages. 

“No strategy is being developed to deal with arrears in buy-to-let mortgages. And unless we act to tackle this issue now, there is a serious risk that the private rented sector will fall apart,” she said.

This is especially worrying, as problems in this sector may well have serious repercussions on many Irish families. 

According to Ms Hayden: “The majority of those who own buy-to-let properties are not developers and do not own vast amounts of property; they are just ordinary people. Many of them were encouraged to buy property during the boom years and are now in negative equity. And many of their properties are secured against family homes so, ultimately, an increase in arrears in buy-to-let mortgages puts family homes at risk.”

According to the last census, the number of people renting homes instead of owning them has increased, with rented accommodation now making up almost a fifth of the entire housing stock. 

“Private rented accommodation is a default safety net for people who cannot access housing in any other way. If that safety net is taken away because small-time landlords can no longer afford buy-to-let mortgages, then what options are left for those who currently depend on the private rented market?” said Ms Hayden.

Threshold was founded in 1978 and is a charity whose aim is to secure a right to housing, particularly for households experiencing the problems of poverty and exclusion. Its main concentration of work is within the rented sector. The charity operates a national office, based in Dublin, and three regional offices, providing advice and representation to almost 20,000 people each year. Further information is available at www.threshold.ie

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