Sunday 23 October 2016

Home Economics: Answering your property questions

Published 17/04/2015 | 02:30

Couple need a loan to help them with the cost of moving house
Couple need a loan to help them with the cost of moving house

Our property expert answers questions on water rates for an empty property selling and replacing a family home.

  • Go To

Question: I have a property which was rented out for around five years but it is not currently let. I'm making some changes to my investment portfolio and don't want to engage in another lease until I've decided what to do with it. My dilemma is this: as I have no tenant will the new water charges be waived? I haven't received a bill yet and haven't registered the apartment with Irish Water as I thought it didn't apply in these circumstances - there'll be no use of water while it is vacant. Am I wrong?

Sinead replies: I fear you are. Simply owning the property is enough to incur water charges and there is no mention of a waiver for anyone, except those who have their own water supply. But there is a provision for a lower charge for a property not permanently occupied, for example a holiday home, or a vacant property like yours.

If the unit is connected to both waste water and supply services, the maximum cost is €125 per year for both if it is unmetered. If it is metered, the charge is a minimum of €125 per year (maximum cap is €260), but obviously you would expect it not to go to this if there is nobody using it.

In any event, you must register with Irish Water irrespective and it's possible a bill may be issued to the last known occupant, which may well be your previous tenant. You have until the extended deadline of June 30 to do so. It allows you apply for the water conservation grant of €100 which will offset almost all the charges in your case.

Question: My wife and I would welcome your assistance with clarifying the process associated with selling our family home (wholly owned by us) and using the funds realised to purchase a replacement property. We cannot seem to obtain a short term overdraft, say a month, to facilitate us with moving from one house to the other. We own two other rental properties and have approximately €100,000 tied up in Bonds maturing over the next year. We have offered to sign over deeds and bonds as collateral but to no avail.

Sinead replies: I passed on your query to Karl Deeter of Irish Mortgage Brokers who is as puzzled as I am by your inability to access funding. It seems you require a very short term facility to enable you to move between properties, to cover removal costs, rental and await the deals to close.

You mention you wanted an overdraft, but this is generally regarded as an ongoing facility which is harder to get. I wonder is it more tenable to look for a fixed short-term loan instead where asset-backed credit might be more attractive. If you have had past credit issues (like missed payments or arrears), the bank may be being cautious for this reason.

Can you ask them the reasons for the refusal and if they are not prepared to state them, write in to them for clarification, suggesting that you may take it further. Your age, although I don't know what it is, may be a factor also.

In one sense, I understand the bank not wanting to use the bonds as collateral - they are not liquid cash and cannot be encashed readily, although many offer that facility with some loss of interest.

You don't say how much the bridging is, but if it's under €100,000 I can't see the reluctance with so much equity available, however if your other properties are tied up in bank loans, than your own bank won't be able to take a lien against them as security.

Do make more enquiries - there may be something you're missing.

The Ryan review

From the wall-to-wall commentary on mortgage arrears you'd be forgiven for thinking that every second loan was in default. 

Let's put some numbers in perspective: 60pc of homeowners in Ireland do not have a mortgage on their principal dwelling. Of the 40pc who do, around 8pc are in arrears. Now, just think about that.

The majority of people, by a long mile, are not involved in this 'National Conversation' except in the abstract. They include an older generation who paid off their loan many years ago and everyone else who is getting on with paying theirs off slowly and steadily, no doubt sacrificing along the way to do so.

That said, of course one has empathy for those who find themselves on their uppers, unable to pay an unsustainable mortgage they either shouldn't have been given, or where circumstances such as job loss hit them hard.

Whether we should feel sorry for the very many who decided to become amateur landlords with a second, third or fourth property now in arrears, is a separate matter of course, but sometimes it can feel as if you're almost bound to feel guilty for making normal repayments every month on a mortgage you took out and can still afford, and yet this is the reality for almost everyone.

Some commentators do get a disproportionate amount of airtime to promote a cause that affects the few. Banks certainly haven't helped by their reluctance and recalcitrance to handle the arrears issue, which indeed, looms large on their books nonetheless.

Indo Property

Read More

Promoted articles

Editors Choice

Also in Life