Where's my bailout? How to break chains of negative equity
Misgovernance has left one in 10 of this country's citizens trapped in their homes. Marc Coleman says it's time to free the innocent
Published 15/11/2009 | 05:00
THE next time you're walking down any footpath in Ireland with more than 10 people walking along it, I'd like you to conduct this simple exercise; visualise one of the people you see walking towards you with Guantanamo Bay-style orange jump suits, with hands, feet and neck chained together. That is roughly the share of people in this country suffering from negative equity at the moment. Actually, for those it affects, the financial coercion of negative equity has the same effect as chains -- the head hung low, feet shuffling forward in despair and that facial expression of permanent defeat.
And yet they are guiltless, more than guiltless. They are victims, made vulnerable only by their belief. Belief that their leaders were telling the truth when they warned them to buy properties in case prices rose further. Belief that the banks had their best interests at heart when they lent them many times their income. Belief that estate agents were telling the truth about the prices being bid.
They are victims of a vast network of misgovernance encompassing our land laws, our planning system, our spatial strategy, our system of financial regulation, and, yes, our banks. They are also victims of a State that plundered them for tax revenues. At its peak levels of 2006, the State took over €2bn off of these people in stamp duty. And it was those who bought their properties in 2006, the peak of the market, who are suffering the most. The policy-makers who are inflicting this misery on them have no reason to care. Most of them -- senior civil servants -- bought their houses in the 1980s or early 1990s, before stamp duty became an issue. Many of the ministers who support the retention of stamp duty also don't care. Why would they? In their constituencies, house prices are low enough for the tax not to be a problem.