Talking Property

We can't carry the weight of our debts, says ISABEL MORTON

THERE are times when I feel like a broken record repeating the same old warnings. Is anybody listening, I wonder?

There have been rumours and rumblings for months now, that 2011 would be the year in which we would see the outpouring of personal debt. And already, we know that it has come to pass.

I won’t bore you by regurgitating Central Bank figures but if 44,508 mortgages were in arrears of 90 days or more by the end of December, then you can assume that the figure has escalated again by now, given the introduction of the Universal Social Charge and the increase in bank interest rates.

And, as interest rates are likely to go up again this year, so too will the number of mortgage holders who will be unable to service their loans.

This situation can’t be allowed to continue. It must be considered as the number one priority for the new government. Irish citizens can no longer carry the weight of our bank debts. It is demoralising our people and breaking our spirit.

Personal financial dramas are being played out in homes all around the country, in all areas and in all walks of life. By permitting this situation to continue, we are systematically ruining our country.

Even those who came close, but were lucky enough to have avoided financial ruin, are so shaken by the experience that they are unlikely ever to fully recover.

Last weekend, I met a couple who are only now beginning to breathe again.

Having seen the writing on the wall – their business had taken a hit – they decided to put their beautifully restored Victorian home in Dublin 6 on the market last year, as it was becoming apparent that they would no longer be able to service their mortgage.

By some “miracle” (to use his description) their home sold quickly, quietly and (relatively speaking) quite well.

He described the feeling of incredible relief that came with no longer having to shoulder the burden of a heavy mortgage along with the terrible worries relating to the survival of his business.

His wife, equally grateful to be mortgage free, was stoically trying to adapt to their new set of circumstances and their new way of life in their rented house. They went to a lot of trouble to make the move “a happy adventure” for their three sons, in the hope that they would not find the transition stressful or upsetting, and it appears that they have succeeded, although she admitted that she feels vulnerable now that she’s no longer a homeowner and misses her “real home” and the area in which she once lived.

He’s adamant, however, that he never wants to own a home again unless he can buy it outright, without requiring a mortgage, as he never wants to be at the mercy of a bank again.

Recently, just as they were beginning to relax in their rented home, with their business showing signs of recovery and their lives stabilising somewhat, an estate agent contacted them, wanting to bring a prospective buyer to view the property.

Fearing their landlord was going to sell the property and renege on their three-year rental contract, they contacted him only to find that the estate agent had not in fact, been instructed to sell the house but was making a “cold call” in the hope of generating a sale.

On this occasion, the couple have been reassured by the owner but still feel unsettled by the estate agent’s approach.

Indeed, it appears that an increasing number of people are feeling vulnerable these days: the recently published Central Bank figures confirm that the number of home repossessions went up again, to 106 in the last quarter of 2010.

Apart from the forced sale of properties held by banks, receivers and a few individual owners, which are being sold by public auction (previewed in this supplement), there are those which are openly on the market and more again which are for sale privately.

I’m almost embarrassed to admit that I’ll be amongst those interested in viewing some of these properties, as I’ve recently been trying to find a suitable home for a couple returning to Ireland, with a generous budget, who want a house in Dublin 4 or 6.

However, boom or bust, the rules of property buying never change.

In fact, now that buyers are sitting in the driving seat, they expect to be able to tick every box on their wish list, so location, orientation and condition are now more important than ever before.

Believe it on not, despite the fact that every second person I meet appears to be under severe financial pressure and would happily sell their souls, never mind their homes, to get out from under the banks, I have yet to track down something which fits the bill.

ISABEL MORTONis a property consultant