House Prices Falling but Mortgages increasing

Socialist Party Cork City Councillor Mick Barry this morning called for mortgages to be cut in line with falling house prices in the wake of the latest Permanent TSB/ESRI report showing major falls in house prices last year.

The report showed house prices to have fallen by an average 10.8% last year following on from falls of 18.5% in 2009.  House prices are now reckoned to be down by an average of 40% on 2006’s peak boom prices.

Cllr Barry said:  “It is completely unfair that a couple whose house is now valued under 200,000 euro might be paying a mortgage on a peak boom time price of more than 300,000 euro.  In such a case the mortgage should be adjusted downward to reflect the current value of the house with scope for further cuts should house value fall further. These young couples are breaking their backs to pay these mortgages and rightly feel that they have been swindled by the banks and by greedy speculators.”

He added that such a policy would only be feasible if the banks were to cancel their debts to bondholders:  “A nationalised banking sector should serve the interests of ordinary people not the interests of greedy speculators and bondholders.”

Savills the auctioneers report this morning that the sharpest house price valuation falls affect first-time buyers in the Dublin and Cork areas.

Mick Barry is the Socialist Party and United Left Alliance candidate for the Cork North Central constituency.

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