Cowen rules out move to help house market along lines of car industry aid

By JODY CORCORAN

Sunday January 03 2010

THE Government has no plans to help people stuck in the trap of negative equity, Taoiseach Brian Cowen has indicated in an interview with the Sunday Independent.

Asked about a Nama-style intervention for people unable to sell homes without incurring significant financial loss, Mr Cowen said: "The situation you're talking about is how do we assist people who bought at the height of the boom. . . in five years' time we'll have to see what the market situation is then. Of course, there's difficulties for people to overcome, but you can't undo what's happened."

A possible solution would be to allow homeowners carry negative equity into their next property, but the banks are reluctant to allow this. The Government could, however, step in to "socialise" some of the private debt, according to Derek Brawn, the author of Ireland's House Party.

More pressing, however, is the prospect of spiralling house repossessions expected this year, a scenario which has been described as a "timebomb" facing the Government.

The Taoiseach told the Sunday Independent that the Government had worked, and would continue to work, with the banking federation to assist people who were facing repossession.

He said: "The thing I would say to people is, get in touch, come up with an arrangement. The worst thing people can do is to keep away." While the number of repossessions is increasing, Mr Cowen said that, compared to the UK, it was "very, very minor" here.

Mr Cowen indicated that the Government had no plans to stimulate the property market, as it had sought to do for the retail sector and motor industry in the Budget.

He said: "People are chasing value. I mean, you've up to 100,000 houses in this country, between those newly built, in construction and second-hand houses, coming on to the market. The supply is about four times the demand. So people are looking for value. That's a market issue."

'No Nama' to tackle negative equity - National News, Frontpage - Independent.ie