Prime Time - 4th October 2012

Thursday 04 October 2012 18.41
Prime Time - 4th October 2012

Robert Shortt blogs ahead of his report tonight on buy-to-let mortgages:

Our property boom and bust is a saga with many chapters: Anglo, the Bailout, the travails of Family Quinn and the ongoing diplomatic machinations surrounding our legacy of bank debt. One chapter only partially opened is the buy-to-let sector.
Back in the boom, it was hard to hop into a taxi without emerging with information on the property portfolios of a nation in thrall to the wonders of upward only property prices.

At the height of the boom, investors big and small piled into buy-to-let property. Sweetners like interest only tracker mortgages were offered as competition between banks was fierce.

Today, just over €23billion euro worth of loans to buy-to-let investors are outstanding in Irish banks. That doesn’t include those who took out mortgages with Bank of Scotland or Ulster Bank. Roughly 30% of those mortgages are in arrears of over 90 days.

Rents, while stabilising in parts of the country, are down compared to boom time rates. There are new taxes like the second homes tax and a property tax is on the way. Apartment prices are down 60% compared to their 2007 high.
What does this mean for those unlucky investors? And what does it mean for our bailed-out banks?

Tonight on Prime Time, we look behind the figures to talk to the people who took a punt and are now paying the price.

In studio, we’ll be talking to David Hall who is forming a new group - Irish Mortgage Holders Association - to campaign for those in trouble with their finances. We’ll also be hearing from Pat Farrell of the Irish Banking Federation.
Robert Shortt