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Morgan welcomes positive equity report from estate agents

7 February, 2007

Sinn Fein Housing spokesperson Arthur Morgan TD today expressed a cautious welcome to research from estate agency Savills Hamilton Osbourne King that stated home-owners who bought over four years ago are likely to have more equity in their property than debt.

Deputy Morgan said, "I welcome the research from the estate agency which says that people who bought over four years ago are now more likely to have more equity in their property. However, the financial regulator has this week warned of personal indebtedness through equity release. Mortgage lending in this state averages at about €2.5 billion a month and the total outstanding mortgage debt is €113 billion. This research is good news for those who bought their house before 2003, but what happens to those who bought their properties after that?

"Out of control house price inflation has led to young working families and first time buyers taking on exorbitant mortgages. The average price of a house in the 26 counties can be anything up to €532,000. House prices are now increasing at nearly twice the rate of wage increases. Buyers are stretched financially to obtain a home. The number of mortage repossessions is also increasing. It is no wonder that public sector workers such as nurses, fire-fighters and teachers can no longer afford to buy in major cities.

"While a key factor in the staggering rate of house price inflation is the erosion of the supply of social housing which has forced many into the private market that can ill-afford their mortgages, the problem has been worsened by extremely high land costs and widespread speculation. This government needs to put in place a robust set of measures to combat rising house prices and offset potential negative equity problems immediately." ENDS

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