The property people

Over here we may think that the collapse of the property market has dealt us some particularly cruel blows, but actually we are not as badly affected as we might be, and not as badly as people in the United States. According to the latest estimates, 1.2 million homes will be repossessed by banks in the United States this year because of mortgage or loan defaults. To put that in perspective, in Ireland last year some 400 homes were repossessed; if we were having the same repossession rate as in the US that would have been over 10,000 in Ireland.

Nevertheless, many people over here are living with negative equity, and many are struggling with mortgage repayments. On top of that, homeowners with notionally large asset values but average incomes may be about to be hit with a property tax (which, in fairness, we ought to have). Maybe it is time for us to consider whether our home ownership tradition actually makes much sense any more, or possibly even whether it ever really did. It is doubtful whether property values will ever be such a safe bet again, and our habit of occupying heavily leveraged property is at best rather curious. These islands are pretty well unique in Europe for having such a large home owning proportion of the population. Maybe its time to re-think all that.

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6 Comments on “The property people”

  1. Anna Notaro Says:

    not sure Britain & Ireland are unique in Europe, in my home country Italy (particularly in south whose cultural roots lie in agrarian society) home ownership is around 70% and a house is still considered a valuable affective (and not only economic) asset to pass on to the next generation..

  2. Dermot Frost Says:

    The main difference is recourse vs non-recourse loans. In the US if they repossess your home that’s the end of it. Here you get turfed out, your old house sold to the quickest seller and any shortfall in paying off the loan is still your responsibility. With a depressed market it is not in the banks’ interests to be repo’ing homes in Ireland.

  3. Vincent Says:

    There is a way of doing the tax thing without the levy on the value of the property. But on Rent from that property. This value could be done road by road on a yearly basis without to much fuss. And regardless if the property is rented or not.
    Example; Aylesbury Rd, House #8888. Rent 100,000pa. Therefore Rent Charge @ 10%=10,000. This would set a value on the entire road of say 50 houses, returning 500,000 yearly. But this charge would be levied full or empty. So, we would have none of that situation of half a city of empty rotting housing like before.

  4. Jilly Says:

    The current emphasis on property ownership won’t change unless private rental tenants are given the kind of legal status and protection they have in the countries which do not have such high rates of home ownership.

    Anyone who’s ever been a private tenant in these islands knows what a precarious existence it is, not to mention barely regulated or taxed (or rather, existing regulations and tax laws are barely enforced). I was relatively late becoming a home-owner (the joys of a long academic training), but when I did, the thing I remember finding the most enjoyable was that I was no longer answerable to an eccentric/neglectful/unpleasant landlord.

  5. Keith Says:

    There might be a push back underway though, these are recent development worth reading:

    Josh Rosner: “Could Violations of PSA’s Dwarf Lehman Weekend?” (

    Evicted family breaks locks, reclaims home (

    Would be interesting to see if banks have been that sloppy here.

  6. Aengus Says:

    Ferdinand, I have four issues with your statement about rethinking our ownership model.

    Firstly, if the vast majority of people rented their homes, I feel we would end up with a small minority of property owners with an unacceptable percentage of wealth and this is not a healthy situation for any country to be in.

    Secondly, in order for this to work the cost of renting over 50 years (average lifetime a person would be in rented accommodation) would need to be lower than the cost of a 25 year mortgage. I think unlikely.

    Thirdly Irish people like to feel an attachment to their property and area and speaking for myself I would find it hard to have roots in an area that I rented in.

    Finally, I feel it is an admirable quality that Irish people want to aspire to owning and developing their own property.

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