1st July 2003

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Lending institutions have a responsibility for out of control house prices

Sinn Fein spokesperson on Housing Arthur Morgan TD, reacting to the latest figures on house prices and mortgages, accused the main lending institutions of ``fuelling the fires'' of unacceptable house price increases. He said that the main banks, building societies and other lending institutions had a ``moral and social obligation'' to curb the excessive and potentially ruinous amounts that are currently being given out as mortgage loans.

Deputy Morgan said:

``The latest house price figures make for depressing reading as do the latest figures for mortgages. That the two are inextricably linked is not hard to see. The ever-spiralling house prices, with the exception of last months blip in the chart, shows that the lending institutions are continuing with a reckless if not criminal policy of providing excessive mortgages, especially to first time buyers. This is fuelling the fires of the unacceptable house price increases and cannot be allowed to continue. The banks, building societies and other lending institutions are giving away mortgages in some cases of up to five and six times the amount of annual income coming into a home.

``They must realise that their drive for profit and greed must be tempered by their social and moral obligation not to allow people to borrow beyond their means. The excessive and potentially ruinous amounts currently being given away as mortgages must be curbed. If the lending institutions aren't willing to police themselves in this matter then the Financial Ombudsman and the Central Bank must step in and take immediate action.''

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