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.