Up to 300,000 Irish homeowners are in negative equity

Posted on Friday, January 14, 2011 at 01:03 AM

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A massive 300,000 homeowners could be trapped in negative equity according to the Irish Mortgage Corporation.

As a result, many homeowners are being forced to stay with their existing loan provoiders.

The curse of negative equity prevents property mobility according to Frank Conwaym the director of the Irish Mortgage Corporation.

"Homeowners who are in negative equity in their homes can owe as much as €200,000 or more than their property is actually worth. Despite the Government reducing stamp duty to 1% in the latest budget, it will make little difference to hundreds of thousands of property owners who are currently in negative equity," he told the Irish Examiner.

"For many mortgage holders who hold standard variable rates on their homes, those who are in negative equity will be unable to move to another lender for a better deal.

"During the property boom, Permanent TSB was the largest residential property lender in the Irish market. However, today, it no longer offers competitive fixed rate deals to existing customers. Typically, to switch to another lender, a mortgage holder could not exceed between 80% and 90% on their homes," he said.

According to data from the Economic and Social Research Institute, around 250,000 to 300,000 Irish homeowners are currentlt in negative equity.