News
A new hope for first-time buyers
Ulster Bank has created a new initiative which is to be launched today in order to stimulate the Irish property market. The new scheme will be targeted at first-time buyers as well as property developers. The initiative will offer a mortgage to first-time buyers with built-in protection against negative equity.
What does this mean for property developers?
If property developers decide to join this new initiative, they will have to put aside up to 15% of the value of the home which will be repaid to the homeowner after five years if there is negative equity.
What is negative equity?
When the value of a person's mortgage is more than the value of their home then there is "negative equity" which is a major deterrent for prospective homeowners entering the current housing market.
An example of how the new scheme will work is as follows:
If a homeowner owns a house worth €200,000 and it falls in value by 15pc, €30,000 will be paid off their mortgage at the end of the five years.
Attractiveness of scheme to developers
The new scheme has attracted 10 developers who are located throughout the country in areas such as Kerry, Louth, Dublin and Kildare. Ulster Bank is expecting more developers to sign up to the new initiative after it has been launched today. The scheme is currently restricted to developers who have taken out loans with Ulster Bank as this allows the bank to have a better knowledge regarding solvency of developers who will be part of the scheme.
Pressure on other mortgage lenders
The new initiative is set to put extra pressure on Ulster Bank's competitors to offer a similar scheme to first-time buyers in order to increase the overall demand for mortgages.
For further information, please contact Malcomson Law by calling 01 874 4422 or complete an Online Enquiry Form. Your enquiry will be forwarded to a solicitor who specialises in Property Developments or Conveyancing.
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