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Building society annihilation a disaster for mortgage hunters

Yesterday's news that the 150-year-old ICS building society has finally been sold marks an inglorious end to the company that was mentioned in the draft versions of James Joyce's Ulysses when Leopold Bloom wanted to buy his dream house.

Time will tell what this forced sale will mean for today's 2,000 odd customers who borrowed from a Bank of Ireland-owned mortgage company but now find themselves forced to do business with an unregulated and publicity-shy investment fund.

The omens appear to be good; the new owner has promised to abide by the code of conduct which prevent other lenders from endlessly harrying customers in arrears.

Legal protections have also been promised for the increasing number of borrowers who find themselves in this position but those protections have not been enacted yet.

The end of ICS, a building society formed to provide housing finance to Protestant civil servants and run in the early days by engineer William Dargan and future unionist leader Edward Carson, marks another contraction in the number of Irish building societies and fewer lenders for those who want to buy an ordinary house.

The last 20 years has seen the almost complete annihilation of the building society sector. The ICS was among the first to go followed by Irish Permanent and First Active. EBS, a building society originally for teachers, resisted longer than most but has also fallen victim to the bust and now belongs to Allied Irish.

In each case, those who had loans with these lenders stood to benefit financially when they were demutalised and it was not hard to persuade board members and ordinary borrowers and savers to sell.

In retrospect, the destruction of this Credit Union-like network of small lenders has been something of a disaster for the next generation looking to borrow to buy a house.

Disaster is perhaps too mild a word. Inter-generational robbery by baby boomers might be closer to the mark.

Perhaps a new wave of alternatives will gradually be created by the internet generation but the destruction of our building societies in the deregulation mania of the 1980s was a great loss.

Irish Independent