PROPERTY MARKET:FINE GAEL finance spokesman Michael Noonan has said it is imperative the property market reaches a floor.
He declined to say where that point should be, but added that his party did not believe in government intervention to set prices.
Mr Noonan yesterday blamed Government interventions – in the form of tax breaks – for the excessive growth in the construction industry. He noted that negative public perceptions of the sector were misplaced and said all healthy economies needed a well-functioning building industry.
He was speaking yesterday morning at a press briefing as the party published a six-point programme aimed at assisting families in mortgage distress. All six points had previously been announced in its manifesto. The purpose of publishing yesterday’s document, said a spokesman, was to communicate the party’s position to those in mortgage distress as effectively as possible.
The measures include additional tax relief on mortgage interest for purchasers of residential properties in the period from 2004-08; a deferred interest scheme to stem repossessions; and new legislation to ban financial institutions from charging penalty interest rates on those behind in their repayments.
Mr Noonan said the banks benefiting from the State guarantee had not restructured sufficiently. If they did so, he said, their cost base would be reduced, allowing mortgage interest rates to fall by one quarter of a percentage point. If elected, Fine Gael will insist the banks present restructuring plans so this can be achieved.
Mr Noonan would not rule out job losses in the banking sector as a result but said that was a commercial decision for the banks and that Fine Gael did not want to micromanage them.
He said there had not been “cultural change” in the banks and accused the outgoing Minister for Finance, Brian Lenihan, of not doing enough to drive change, noting that one-third of directors appointed before the September 2008 bank guarantee remained in place in the guaranteed banks.
Meanwhile, the United Left Alliance called for a freeze on mortgage interest rates and called for the outlawing of repossessions.
The alliance represents a spectrum of political parties including the Socialist Party and People Before Profit.
ULA candidate for Dublin West and Socialist Party leader Joe Higgins said homeowners needed to be able to recalibrate the amount paid for their houses with the financial institutions to bring prices down to the real value of their homes.
“What we are calling for is a freeze in interest rates for householders with these massive mortgages which they were forced to take out – these are the ordinary working people who are now in their 30s – they were forced to take out huge mortgages during the boom just for the civil right of getting a roof over their head.
“They were the victims of the speculators, the bankers and the massive profiteering that went on in the property market and then were hammered into 35 or 40 year mortgages and are now in negative equity. It is utterly unjust they should be now doubly victimised for the speculation and the profiteering that went on,” he said.