Our Irish banks are making homeowners pay way over the odds for mortgages?
Ireland’s banks are making homeowners ‘pay way over the odds’ for their mortgages.
Banks should be made to pass on cuts in variable mortgage rates to all borrowers – not just those going for new loans, Fianna Fáil has said.
The party has tabled a motion in the Dáil calling for Finance Minister Michael Noonan to “persuade” banks to reduce interest rates in line with record-low eurozone borrowing costs.
It also wants banks to commit to making cheaper variable mortgages available to all customers, not just new clients.
Fianna Fáil finance spokesman Michael McGrath said he wasn’t asking the government or Central Bank to set interest rates – but to use their influence on the banks to get a better deal for customers.
Standard variable rate customers are an exploited group, they are paying way over the odds by any measure and something needs to be done about it,” he said.
The latest figures from the Central Bank showed the average interest rate on a new, variable mortgage was 3.26% at the end of January – compared to the equivalent eurozone rate of 2.3%.
The disparity between Irish and other euro area mortgage rates has been growing wider since mid-2012, and it comes despite the European Central Bank introducing record-low lending rates in September last year.
Meanwhile, major banks have been enjoying higher margins – the profit it makes on its loans – with AIB reporting in its recent annual results the figure rose to 1.69% in 2014 from 1.37% the year before.
Irish banks are still weighed down with large books of tracker mortgages – which directly follow the ECB’s official rates – handed out during the boom. The average rate on these outstanding loans was 1.04% in December.
Nearly 20% of all Irish mortgages on peoples’ main homes remain in arrears with almost 8% of the total over 720 days behind on repayments.
‘EXTORTION BY ANY MEASURE’
McGrath said the Bank of Ireland previously told a finance committee its cost of raising funds was 1.15% – compared to a standard variable rate of 4.5% for existing borrowers.
That’s extortion by any measure, that level of a margin being applied on one particular group of customers is fundamentally unfair,” he said.
All the major banks have cut interest rates since September, but the Bank of Ireland and Permanent TSB only applied their reductions to new loans.
The government took a 99.8% stake in AIB after the bank bailout, while it has a 99.2% share in Permanent TSB. It also owns about 14% of the Bank of Ireland’s shares.
BAILED-OUT BANKS ‘INDEPENDENT ENTITIES’
But Noonan said the banks were ”independent, commercial entities” and it wasn’t appropriate for him to get involved in their mortgage policies.
However he added regulating interest rates was an area under “active review” and his department had been in contact with the Central Bank over the issue.
I think the views you are expressing are shared widely by members on all sides of the house,” Noonan told McGrath.
He said he would ask Central Bank governor Patrick Honohan to ”see what influence (he) can bring to bear” on lenders.
Taoiseach Kenny calls on Irish banks to pass on the interest rate reductions
Enda Kenny said the governments of all countries will be represented by diplomatic services at 1916 Rising commemmorations
Taoiseach Enda Kenny has said the banks should treat consumers with “a degree of understanding” and pass on interest rate reductions.
Sean O’Rourke on RTE said Mr Kenny said it is not for Government to set the interest rates.
However, he said the banks are back in profitability, they are making money and they are paying a very substantially reduced interest rate on the money they have to borrow which should be passed on.
Mr Kenny said he does not want anyone to lose their homes and said a number of options will be introduced by the Government this month to address issues surrounding those in mortgage arrears.
Speaking in the Dáil, Mr Kenny said the “Government did not fix and restructure the banking system for the benefit of bankers, it’s for the benefit of customers”.
Speaking from Dublin’s Collins Barracks earlier, Mr Kenny said no member of the British Royal family will attend the 1916 Easter Rising commemorations.
He said the governments of all countries will be represented by diplomatic services.
“This is our year, this is our celebration and of course the governments of other countries will be represented by their ambassadors”.
On the topic of water charges, Mr Kenny would not be drawn on reports that legislation would be introduced to recoup unpaid charges from people’s earnings.
He said he expects that the power will be approved by Government for “compliance in this case, for people who can pay”.
On the Fennelly Commission, he said he was “very happy” that he had “complied fully” as he should, in accordance with his responsibility both in writing and at the Commission of Investigation.
He said when Mr Justice Fennelly presents his report he will have it published in accordance with the law.
Alan Kelly outlines a €1.5 billion plan for Irish social housing
Combined funding for Dublin authorities comes to over €500m for 6,849 new units
The Minister for the Environment Alan Kelly and Minister for State Paudie Coffey pictured (right) at Lord Edward St in Limerick city where they announced housing targets for each local authority area.
Local authorities that achieve their targets set out in a €1.5 billion social housing plan designed to reduce the housing waiting lists by a quarter will be rewarded, according to Minster for the Environment Alan Kelly.
This will see local authorities that meet their targets given additional resources and those that do not surrendering some of their allocation.
Details of the social housing targets for local authorities to 2017 were unveiled in Limerick on Wednesday.
Over €1.5 billion is to be spent on a combination of building, buying and leasing schemes by local authorities designed to accommodate 25 per cent of the 90,000 households currently on housing waiting lists for social housing.
The combined funding total for the Dublin local authorities comes to over €500 million for the construction or refurbishment of 6,849 new units.
The Dublin local authorities have been allocated housing targets above what they proposed to the Department of Environment to ensure strong delivery where the housing need is greatest.
Among the other large local authorities receiving significant sums of money areCork City and County Councils who have been allocated over€204 million and Kildare County Council which is to receive just over €86 million.
The local authority allocated the lowest funding is Leitrim County Council with €4.4 million. However this sum should reduce the housing waiting list by almost 50 per cent.
Roscommon County Council is receiving €5.5 million with an expected reduction of 60 per cent in the housing list numbers.
Approximately 300 separate building proposals by local authorities are currently being assessed by the department and will be announced in a number of phases starting in mid April.
Construction is already underway for social housing in approximately 33 sites throughout the country.
Speaking during a visit to a social housing development site on Lord Edward St in Limerick city, where 83 units are being constructed, Mr Kelly said there was no political bias in the allocation of local authority funding and insisted all decisions were based on need.
“We went out to all local authorities and we asked them to submit their plans. There is a key demand in Dublin and a large tranche of this funding is going towards Dublin,” he explained.
Mr Kelly said other areas with more demand include Laois County Council which has a commuting distance to Dublin and where €31 million has been allocated for the construction or refurbishment of 366 new units.
Limerick City and County Council is to receive over €57 million to spend on 753 new units.
This work will be separate to the ongoing Regeneration programme, and is expected to reduce the housing waiting list by 27% in Limerick.
“What we are doing is we are giving every local authority a chance to show what they can deliver and I fully intend on rewarding local authorities that can deliver quickly and on time and within budget,” said Mr Kelly.
“I think particularly those who have high demand areas, we should allow those to go even further and it will my intention to ensure that happens…..I expect from my engagement with all the local authorities who have key demands that they will be the ones that will deliver the most,” he added.
Mr Kelly expects the programme to be completely finished by 2017 and said there is a strong possibility that more projects will be announced as local authorities are “ramped up” on planning resources and design.
“I think the privatisation of local authority housing was a mistake that went on for a decade. But now we have now turned that ship around and this is s very positive announcement,” he added.
The average cost of building a social housing unit is €185,000 – meaning in some parts of the country it will remain cheaper and quicker to acquire as opposed to build.
Today’s announcement comes as part of the government’s €3.8billion social housing strategy announced last November to 2020.
If all local authorities achieve their targets they will be able to access this funding source to finance additional projects.
Each local authority was asked to bring forward housing unit targets and specific building projects out to 2017.
Local authorities will have some discretion to adapt to local circumstances but all will be expected to kick start a building programme.
Most party support for Dunne’s Stores striker’s
Margaret Heffernen (above) as seen in her younger days. A tough cookie to deal with for the unions.
The FF LEADER SAYS THE DISPUTE IS LIKE SOMETHING FROM THE 19TH CENTURY?
Taoiseach Enda Kenny has backed Dunnes Stores workers in their opposition to the company’s alleged use of low-hour contracts.
Pickets are to be placed outside all Dunnes branches on Holy Thursday in a dispute relating to the company’s alleged refusal to negotiate on the many issues.
On the eve of the strike action, Mr Kenny told the Dáil: “I hope the strike does not go ahead, but I support the workers in their right to have clarity about their working lives.’’
He said the message to employers was that the matter could be sorted out.
“These workers are loyal workers,’’ Mr Kenny added.
“They provide services every day of the week on a 24-hour basis and that should be recognised.’’
The Taoiseach was replying to Fianna Fáilleader Micheal Martin who said the strike was essentially about low-hour contracts which had become the norm in certain sections of the economy.
A major employer was exercising power over its employees, he said.
“There is no decency at the heart of the relationship between this employer and these workers,’’ he added.
Mr Martin said “it was “like going back to the 19th century’’, adding the system was being used to control workers.
Sinn Féin leader Gerry Adams said his party also supporter the company’s workers.
Planet Earth is now greener than in 2003, despite Amazon rain-forest losses
The researchers, who carried out an analysis of 20 years of satellite data, published their findings in the academic journal Nature Climate Change (citation below), explaining that the increase is the result of several factors.
Lead author, Dr. Yi Liu, a remote-sensing scientists at the University of New South Wales’ Centre of Excellence for Climate System Science, said:
“The increase in vegetation primarily came from a lucky combination of environmental and economic factors and massive tree-planting projects in China.”
Mean annual change in above-ground biomass carbon between 1993 and 2012.
“Vegetation increased on the savannas in Australia, Africa and South America as a result of increasing rainfall, while in Russia and former Soviet republics we have seen the regrowth of forests on abandoned farmland.”
“China was the only country to intentionally increase its vegetation with tree planting projects.”
However, the scientists warn that in many other regions, vegetation loss has been “massive”. The greatest declines have been seen on the edge of the Amazon rainforests and the Indonesian provinces of Sumatra and Kalimantan.
New measurement technique
To obtain their results the scientists pioneered a new technique to map changes in vegetation biomass over time, using satellite measurements of natural radio waves emitted from the surface of the Earth.
Fellow lead author, Professor Albert van Dijk, of the Australian National University, said:
“With our approach we found unexpectedly large vegetation increases in the savannas of southern Africa and northern Australia. The increase in Australia occurred despite ongoing land clearing, urbanization and big droughts across other parts of Australia.”
The growth in greening means the amount of carbon captured by vegetation in Australia has risen.
Greater rainfall helped
The strong growth over the savannas came primarily from heavier rainfall, particularly in recent years. Higher CO2 levels may also have helped plants grow there more vigorously.
However, any prolonged period of drought in the savannas could rapidly reverse everything, co-author Dr. Pep Canadell, Director of the Carbon Project, said.
Dr Canadell added:
“This study shows this capture of carbon is very sensitive to year-to-year changes in rainfall over savanna regions, both for Australia and for the global CO2 budget.”
“It’s important to recognize that global warming would be happening faster if some of our CO2 emissions were not captured by this vegetation growth.”
Despite this good news about nature helping regulate our planet’s climate, Dr. Canadell stressed there was still only one way to reduce the impacts of global warming.
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