Sir, – One of the problems that contributed to the property bubble and subsequent crash, apart from the complete abandonment of common sense by the lending banks, was the ability of some purchasers to obtain a mortgage without a deposit or to obtain a deposit either by direct cash gift, or by remortgaging of their own home by parents, to “help” their children get on the property ladder without those children having to demonstrate some financial prudence by saving to get a deposit together themselves.
An appreciation of the true value and difficulty of gathering money together and paying it back did not seem to develop in the minds of many potential purchasers. Money was thrown around like confetti by many, without truly appreciating the real costs of repayment.
However, the proposed 20 per cent deposit requirement is an onerous burden to set for many potential purchasers who are renting. To pay rent and save for a 20 per cent deposit will prove too high a hurdle for many lower and medium-paid workers in the future.
A lower deposit requirement for renters, but one which can prove to have actually been saved over a period of time, would be a far fairer and more effective way of keeping potential purchasers in the real world. Along with the additional proof of paying rent, this would demonstrate the ability of purchasers to manage their own finances and ability to repay, which is far more important than a simple, “no questions asked”, 20 per cent deposit which may have been obtained as a gift from a benefactor.
All deposits, up to whatever minimum is set out by the Central Bank for different categories, including those of people who have been lucky enough to live at home while saving their deposit, should, of course, have to be proven to have been saved as opposed to simply gifted. – Yours, etc,
DAVID DORAN,
Bagenalstown, Co Carlow.
Sir, – Now that the Central Bank has acted on mortgages, we should look at the supply side of our housing crisis.
Far too many retired “empty nesters” now have houses too large for their needs closer to the centres of employment, while those younger taxpayers paying for the pensioners’ income commute large distances to where they can find cheaper accommodation for their families.
It is also perverse that we do not levy capital gains tax on the windfall profits gained from selling a house – even when the size of the house and associated site has no bearing on the accommodation needs of the individual or family. – Yours, etc,
PAUL KEAN,
Dublin 8.