Brian Lenihan: has already introduced a 'bailout'

Eamon Ryan's solo run on a "Nama for homeowners" is baffling because it already exists. The budget announcement by finance minister Brian Lenihan of an extension of mortgage interest relief for property owners, confirmed in last week's Finance Bill, is exactly that: a bailout for those who bought at the wrong time thinking they could make a killing.

The new measures allow tax relief on mortgage interest for seven more years for those who bought between 2004 and 2011, which in effect is everybody in negative equity. The tax relief is the equivalent of 15% of the interest for first-time buyers and 10% for those who are on their second or subsequent property with a ceiling of €3,000 per annum, meaning it is the equivalent of a €60,000 interest-free mortgage loan, or €6,000 for married and widowed people. Is that not enough? In addition, the government also supports mortgage repayments for those who are laid off.

Those in negative equity quite simply timed their investment incorrectly. The idea that the state, via the banks, should now take a stake in those properties is nonsensical, even if foreclosure would mean the need to provide social housing and rent supplement payments. The 300,000-plus empty houses means social housing shouldn't be an issue in Ireland for the next 20 years at least.

Likewise charging a notional rent on part of the home instead of a mortgage removes any incentive to repay the debt and the financial consequences could be huge given Ryan's alarming proposal is uncosted. The simple fact is that banks in Ireland have always been reluctant to seize back houses; aside from sub-prime lenders repossessions are extremely rare in this country, government moratorium or not. Fiddling with the property market by government was a disaster in the bubble; it shouldn't be repeated in the bust. Like most of the Green Party proposals for the property market it needs to be binned.