Irish banks ‘manipulating market’ to lift house prices

Leading Irish banks are intentionally manipulating the property market to improve their financial positions ahead of planned stress tests by the European Central Bank later this year.

Irish banks ‘manipulating market’ to lift house prices

That’s according to founder of the Irish Mortgage Holders’ Association, David Hall who claimed banks were withholding properties to drive up prices and, in doing so, were exacerbating supply shortage.

Speaking to the Irish Examiner, he said: “We have now a property bubble that has been created by a lack of supply and with a lack of releasing of properties by banks... In circumstances where there’s an alleged supply issue and prices are increasing, why have the banks not released all those properties?” said Mr Hall.

“If you stimulate a market and there’s a supply and demand [issue]... you don’t withhold the supply with the clear intention of trying to manipulate the market to increase property prices so as when your stress test comes, you’re in better shape,” he added.

Spokespeople for Bank of Ireland (BoI) and Allied Irish Banks (AIB) denied that properties were being withheld from the market, while a representative of Permanent TSB declined to comment. Properties in possession of the bank are sold by private treaty through auctioneers or estate agents and as such were “fully available to the open market”, according to BoI’s spokesperson.

Mr Hall also said that recent Central Bank figures showed that 45% of restructured mortgages were not meeting their repayments.

“You’d have to ask serious questions about the competency and ability of the lending institutions to give solutions with such a failure,” Mr Hall said.

A spokesperson for PTSB said 92% of its customers who had taken up restructuring were adhering to repayments while BoI and AIB said that such figures could not be released.

Mr Hall also said we were walking right back into the mistakes of the past “with our eyes wide open” and added he had no faith in the financial regulator or Central Bank to stop a repeat of the property market crash.

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