Business Irish

Thursday 22 March 2018

Fury as banks shoot down plan to help first-time buyers


BANKS have shown a complete inability "to respond creatively to the property crisis" they caused, it has been claimed.

According to Senator Fidelma Healy Eames, "it is time for the banks to accept their Nama responsibilities to the taxpayers now''.

The senator was commenting on the failure of the banks to support an innovative new house-purchase scheme.

A Galway company has proposed that couples planning to purchase a new house could rent the house for three years and then purchase the house using the rent paid as a deposit.

A director of Land and Lease, Alan Cheevers, said the scheme has been devised as a response to the changed economic conditions which make it almost impossible for many first-time buyers to raise the 10 per cent deposit that is now required for a new house purchase.

"We have been sending to banks people in full-time employment where one or both were earning salaries -- but they are being refused loans," said the auctioneer.

"Young couples are caught in the trap of paying rent and trying to save for a deposit often on lower incomes than before the boom.''

He said their innovative scheme of allowing couples to off-set three years' rent against the 10 per cent deposit would allow them to purchase a home but would also play a critical role in resolving "the major overhang of unsold houses".

He believes that if the banks agreed to this system he could "shift'' 200 houses almost immediately.

"Nama could get a real return for the bailout of banks and developers on a nationwide basis if they embrace the scheme," said Mr Cheevers.

While local managers supported the scheme, it had been "shot down at HQ level".

Supporting the scheme, Senator Healy Eames said: "Taxpayers have given a lot to the banks and it is time they now gave us an even break that addresses the needs of the people."

Sunday Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business