House buyer grateful for bank regulations

 

Sir, – I wish to respond to Mark Fitzgerald’s comments directed towards incoming Central Bank of Ireland (CBI) governor Gabriel Makhlouf.

I am currently in the process of buying a house and have been grateful during the process for the CBI regulations that have been imposed to stabilise house prices in Ireland and also minimise excess lending and borrowing in the mortgage market.

Recent mortgage holders already are being overcharged due to the lack of competition in the mortgage market – that there is pricing alignment in the market has been well documented.

Furthermore, Irish mortgage rates are generally higher than those in other European countries – widely implied as recompense for Irish banks’ risk mismanagement relating to tracker mortgages.

Notwithstanding these two negative factors impacting on Irish mortgage holders Mr Fitzgerald is now looking to inflate the price of current housing stock by relaxing the CBI mortgage rules. Mr Fitzgerald is quoted as saying that Mr Makhlouf needs “to be told” that these rules are “too binding”.

Well, I believe Mr Fitzgerald needs to be told that these rules are there to protect the borrowers and the lenders by minimising the amount that is borrowed. Any relaxation of these rules will only result in an almost identical increase in the purchase price of properties – a direct transfer of wealth from mortgage holders to firms such as Mr Fitzgerald’s – not to mention increasing the chance of future property crises.

That this fact needs to be repeated to those that were major participants in our last crisis is a major cause for concern and one all future governors of the CBI need to stand up against. – Yours, etc,

DAVID CLAVIN,

Tullamore, Co Offaly.