Developers guarantee on price drops

SHREWSBURY SQUARE and Adamstown are among a dozen developments covered in a new mortgage scheme being offered by Ulster Bank.

Yesterday the bank launched a new mortgage product which guarantees against falling house prices up to 15 per cent in a number of housing schemes.

A first for the Irish market, the “Secure Step Mortgage” gives buyers a five-year protection against falling house prices.

How does it work? Once the buyer has secured a mortgage with Ulster Bank, the developer puts 15 per cent of the purchase price on deposit with the bank. After five years an independent valuation of the house will determine whether the house has increased or decreased in value. If there has been a reduction the funds on deposit will be used to reduce the mortgage – up to a maximum of 15 per cent of the purchase price.

So far, eight developers have signed up with Ulster Bank to participate in the scheme and a total of 12 developments are covered.

In addition to Shrewsbury Square, Adamstown, Steeplechase in Ratoath, College Park and Pairc Chuimin in Kilkenny, Adelphi in Dún Laoghaire and Inse Bay in Laytown are among those included in the scheme.

Meanwhile, developer P Elliot is offering a similar scheme to buyers at three separate schemes, Mellowes Quay on Dublin's quays, Priorsgate in Tallaght and Carrington ion Santry. In this case the buyers are free to source their mortgage from any lender and the developer will put the 15 per cent on deposit for five years, explains selling agent Ken MacDonald. As ever, MacDonald is upbeat about the market: "We don't feel the market will go down by 15 per cent but it gives a comfort zone to buyers."