Banks blamed for house prices

 

Some joint mortgage holders were discriminated against when building societies went public, Mr John Browne (FG, Carlow-Kilkenny) claimed.

He said: "It has come to my notice that joint mortgage holders are not joint holders, in the normal sense, in that the first named on the account is the one who has the right to get shares."

Mr Browne added that where one partner abandoned the home and was the first name on the joint account, he or she was still entitled to get the shares, even though the other partner might have been paying the mortgage for years.

He said he had discovered this since First National went public. He added that he would seek to have the Building Societies Act 1989 amended.

Mr Browne was speaking during the resumed debate on the Fine Gael private member's bill, moved by Mr Brian Hayes (Dublin South West) to have gazumping in the housing market made illegal.

The Government has rejected the Bill, claiming that it is seriously defective. Ms Mary Hanafin (FF, Dun Laoghaire) said the banks and the financial institutions were to blame for the spiralling house prices.

She added: "The banks are treating young people in the 1990s in the same way as they treated small farmers of the 1980s. Then the banks, often the same branch, offered different amounts to farmers to out-bid each other for the same patch of land, thus ensuring that modest prices were replaced by exorbitant ones.

"Today, the banks are throwing money at young couples, ignoring the real value of the house or, indeed, their ability to pay."

Ms Hanafin said that if the financial institutions were not prepared to make outlandish sums of money available to house-purchasers, "a modest semi-detached house would not now be selling for the price of a small castle a decade ago".

Mr Conor Lenihan (FF, Dublin South West) said that from some of the comments by opposition speakers, one would think that house prices had started to rise only in the past year.

In fact, the momentum of house price inflation had built up enormously before the change of government.