Fear of the 'Joe Duffy moment' means many lenders are reluctant to offer new financial products to older borrowers in particular
Fear of the ‘Joe Duffy moment’ means many lenders are reluctant to offer new financial products to older borrowers in particularThere can be a lack of downsizing options in the same locality but even when there is, selling your existing home and buying a new one is not straightforward. Photograph: iStock
Bridging loans finally disappeared after the financial crash. But brokers and estate agents believe the return of such facilities could help free up the second-hand property market, where the number of available houses is at a historic low.estate agents found just 11,050 second-hand properties were listed for sale in January this year representing a mere 0.6 per cent of the entire private housing stock in Ireland, with rural and regional Ireland disproportionately affected.
Bridging finance – secured on their existing home on which the mortgage is generally already repaid – could allow them to move on, but is not now available. And, according to Kealy, this is also limiting the ability of some younger buyers who want to buy a bigger home and have equity tied up in their existing property, but not the cash firepower to secure a new property, or not at least without taking a significant risk.
A lifetime loan product is available on the Irish market, allowing owners to release equity build-up in their home, though this is more suitable if, for example, they want to give cash to a child to help them to buy, do up their home, or release funds to support their spending needs.that whether or not to offer this type of loan was a matter for the banks themselves, rather than the Central Bank or the Department of Finance.
And post-crash, provision of the loans more or less disappeared as mortgage demand slumped and negative equity hit many borrowers. Anything smelling of risk was a no-no and, depending on how it is structured, bridging loans do carry risks if property prices start falling or expected sales fall through.
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