Posted: Friday April 08 2011, Blog Tags:
Campaigning in Poetry and Governing in Prose as the saying goes - like many recent election promises this one seems like a good idea but lacks any sort of detail on who will be eligible, how it will be funded and so there's no idea of when it will be in place. The 1 thing for certain is that the introduction of these measures will see the abolition of Mortgage Interest Relief for first time buyers.
The Government was last night unable to say when it would bring in a rescue package for around 44,000 struggling homeowners.
The issue came into focus yesterday as the European Central Bank announced the first interest rate hike in two years -- which is expected to add another €45 to the monthly repayments of a person with a €300,000 mortgage.
But the Government could not say last night when the key measures for struggling homeowners in the Programme for Government would be implemented. Tanaiste Eamon Gilmore said the Coalition was examining several measures, including the provision of extra mortgage interest relief to struggling homeowners.
"This is a Government that is very much on the side of the mortgage-holder and of families and households who find themselves under increased pressure as a result of increasing interest rates," he said.
The Government's plan is based on the election promises made by both Fine Gael and Labour -- who were both keen to attract the support of those in mortgage difficulties.
The key measures being planned include extending the ban on banks seizing people's houses from one year to two years after they get in arrears.
There is a commitment to increase mortgage interest relief by 30pc for the "negative equity" generation who bought houses between 2004 and 2008. This would be worth €166 per month to a person with a €300,000 mortgage. But the measure due to partly finance the cost of this, the scrapping of mortgage interest relief for first time buyers in June, now looks likely to be delayed until the end of the year.
And the Government has promised to make state-guaranteed banks like AIB and Bank of Ireland give up 0.25pc of any future interest rate hikes by implementing cost-cutting plans. Although the Department of Finance provided details of these measures last night, it was unable to say when they would be introduced.
But it pointed out that 18,000 people were already getting a top-up to help with their mortgage interest repayments -- and that the Money Advice and Budgeting Service was also providing assistance to people.
Cork South Central Labour TD Ciaran Lynch, who drew up much of the housing policy that was adopted in the Programme for Government, said it remained a "priority issue".
"This is something that must be dealt with and with the greatest urgency," he said.
Already 80,000 homeowners, or one-in-10 of those who have a mortgage, are struggling to meet their repayments.
- Michael Brennan Deputy Political Editor, Irish Independent