Angry delegate tells minister she's left with just €94 per week

[DublinTexas]

But isn't the whole problem deeper than the feeling of entitlement or unrealistic expectations from the majority of people in this country.

For some reason we are a nation where we think that owning a house is a must (like a status symbol) and large parts of the population wanted to participate in the boom created by bankers/builders and following the supply/demand way the prices went up and people ended up taking out finance that they did now would not be sustainable in future if the slightest change happens to our economy. Personal responsibility went out of the windows.

In other countries where there is no such attitude towards owning houses the current crisis is not feelt as hard as here. Take Germany for example, a nation of renters and while they have problems their banks are in problems because of the US market and not domestic lending. So the folks there don't suffer as much from the crash in the housing market as people here.

A teacher especially should have known what she got herself into. And if she did not know than she might not be the right person for her job.

If you look at other countries for example their civil servants don't have the right to strike in return for their benefits of a life long job and state pension. Sure their public service staff can strike and has less benefits but the core part of the civil service can't strike.

Fact is this lady like others took willingly responsiblity for a lending she did know was not sustainable so I'm sorry she is part of the problem in this country.

 

[casiopea]

We've been through her situation. She chose to buy a 3 bedroom house at the age of 24, borrowing almost 8 times her salary. She now has a smaller disposable income that she thought she would, but has a guaranteed job, enough to pay for food and the roof over her head.

Fact is this lady like others took willingly responsiblity for a lending she did know was not sustainable so I'm sorry she is part of the problem in this country.

Surely the glaring problem here is that she was allowed to borrow 8 times her salary for a property. In most (I want to say just about all but without actual figures Ill settle for most) other countries this person wouldnt get that mortgage. It is as simple as that. It doesnt matter if she is responsible or stupid or just naive or works for the public/private sector or is a teacher or is 24 ....she simply should not have gotten a mortgage on that salary with her downpayment. That is the problem and that is something that warrants the governments attention (even if she did communicate her case badly) so at the very least it doesnt happen again.

 

[Caveat]

....she simply should not have gotten a mortgage on that salary with her downpayment. That is the problem and that is something that warrants the governments attention

Yes, I agree that it is a problem.

But much more fundamental is her acceptance of the loan - she didn't have to take it but the fact that she did puts the onus on her to ensure that she can afford it. If she can't, it's her own fault completely.

Nobody forces anyone to take any loans out. There was nothing stopping her getting a more modest mortgage for a more modest home.

 

[Pique318]

I'm sorry she is part of the problem in this country.

I'm sorry that she's teaching kids how to become responsible adults.

Can anyone see where that particular scenario could lead.


Those who can, do. Those who can't, teach
Hope she's not an economics teacher !

 

[homeowner]

The concept of a pay CUT is not one that public servants have ever had to contemplate in the history of the State ...

This teacher, like all public servants, has made long-term financial decisions on the basis of what she reasonably assumed was a guaranteed level of income and the sudden loss of income is causing many people some hardship - not as bad as losing your job, but hardship nonethless.

Are you seriously arguing that she correctly made a long term financial commitment on the assumption that her income would only ever go up?

She never thought that taxes would rise? or that she may have a long term illness or have to look after someone with a long term illness? or that she might have children and have to leave work? or that for the rest of her life nothing in her personal circumstances would change that would negatively impact her income?

There are alot of ways your income will reduce without a pay cut. Any sane person knows this. That she is a teacher and didnt account for this is mind boggling.

 

[DerKaiser]

Surely the glaring problem here is that she was allowed to borrow 8 times her salary for a property. In most (I want to say just about all but without actual figures Ill settle for most) other countries this person wouldnt get that mortgage. It is as simple as that. It doesnt matter if she is responsible or stupid or just naive or works for the public/private sector or is a teacher or is 24 ....she simply should not have gotten a mortgage on that salary with her downpayment. That is the problem and that is something that warrants the governments attention (even if she did communicate her case badly) so at the very least it doesnt happen again.

Spot on she should not have got that mortgage.

Why? Because there is a chance she will not be able to pay it and will become a burden on the rest of society.

But she was not making that point, she was complaining that her standard of living wasn't all she wished it would be, and that much she is responsible for.

At the end of the day she has a number of avenues open to her such as taking in an extra lodger or selling to reduce her debts to a level she can service. But it seems that people would rather throw a public tantrum these days than show a bit of initiative.

We will probably have have over 600,000 people unemployed and 1,800,000 in jobs by next year with about 400,000 of those in the public service. We'll be in a situation where we'll almost have one person on social welfare or in the public service for every private sector taxpayer.

Is this sustainable? How can anyone in this country believe that a pensions levy amounting to 4% of net pay is something to wail about. Consider a 30% reduction in net pay and you'll be closer to where we are headed

 

[casiopea]

Yes, I agree that it is a problem.

But much more fundamental is her acceptance of the loan - she didn't have to take it but the fact that she did puts the onus on her to ensure that she can afford it. If she can't, it's her own fault completely.

Nobody forces anyone to take any loans out. There was nothing stopping her getting a more modest mortgage for a more modest home.

I agree with what you say with the exception of where you are placing the word "fundamental" (!). For me it is the other way around. Ultimately we are all responsible for our choices (this lady included) but the fundamental problem is that she and many many many people like her were allowed to take ridiculously excessive mortgages (EIGHT times her salary in this case). If proper, stricter and simply more sensible criteria had been in place (as they are in so many other countries) preventing people like this lady borrowing so ridiculously beyond their means then the economy would be a lot healthier now. This woman should face up to her choices and their consequences - but so should the government and the banks. I dont mind (couldnt care less about) the former being immature and in denial but I really hope the latter isnt!

 

[Caveat]

Yeah OK I accept your point - but I can't get away from her misplaced, arrogant indignance at her predicament.

And, I say it again, nobody put a gun to her head and she was presumably well aware of the ratio of the loan to her earnings.

 

[liaconn]

Yeah OK I accept your point - but I can't get away from her misplaced, arrogant indignance at her predicament.

And, I say it again, nobody put a gun to her head and she was presumably well aware of the ratio of the loan to her earnings.

I agree with you in relation to this particular teacher,who was only in her early twenties and should have waited a while before buying. However, I know people who were in their late thirties/early forties and were fast approaching a stage where they would be considered too old to take out a mortgage.They were, therefore, faced with a choice of:

Living in rented accommodation for the rest of their lives, in a country where the rental market is very, very poorly regulated. Therefore, even in old age they would be vulnerable to being evicted at short notice, being subject to unexplained rent rises or having to live in sub-standard accommodation

Staying at home with their parents for ever more

Taking out mortgages that they knew would stretch them to the limit because three times their salary wouldn't buy them a shoebox in Dublin.

If they wanted to buy they had to decide quickly because prices were rising every week. It was inevitible in these circumstances that people were going to borrow more than they could afford, and in fairness these people were in a difficult position. If they waited until the bubble burst they would then have found it very difficult to get a mortgage because of their age.

 

[DublinTexas]

I'm sorry that she's teaching kids how to become responsible adults.

Can anyone see where that particular scenario could lead.


Those who can, do. Those who can't, teach
Hope she's not an economics teacher !

To be able to tech someone to become responsible that person needs to have managed that skill themselves which I don't think is the case here.

Living in rented accommodation for the rest of their lives, in a country where the rental market is very, very poorly regulated. Therefore, even in old age they would be vulnerable to being evicted at short notice, being subject to unexplained rent rises or having to live in sub-standard accommodation.

So than what a responsible goverment should do is change that rather than participating in a ponzi scheme that was called housing market. Other nations are doing fine as a society of "renters", there is no reason why we could not do that here too.

But much more fundamental is her acceptance of the loan - she didn't have to take it but the fact that she did puts the onus on her to ensure that she can afford it. If she can't, it's her own fault completely.

Nobody forces anyone to take any loans out. There was nothing stopping her getting a more modest mortgage for a more modest home.

I agree, just because something is on offer does not mean you have to take it. Just because I could get 8 times my salary on a fixed rate mortgage does not mean that I have to take it over in my case even would consider taking it.

But while she has to take personal responsiblity for her action the problem is that large parts of our govement were funded by unresponsible people like her. Instead of seeing there is an issue the state willingly supported and incentified the ponzi scheme. I'm not saying that relieves her of her personal responsibility but it most certainly is a contributing factor.

We will probably have have over 600,000 people unemployed and 1,800,000 in jobs by next year with about 400,000 of those in the public service. We'll be in a situation where we'll almost have one person on social welfare or in the public service for every private sector taxpayer.

Is this sustainable? How can anyone in this country believe that a pensions levy amounting to 4% of net pay is something to wail about. Consider a 30% reduction in net pay and you'll be closer to where we are headed.

I think that you are more looking at 1,000,000 unemployed with 1,250,000 in jobs (with 400,000 in public service). And before you ask the 150,000 that are missing here are the foreign workers that left the country because they found better jobs at home.

And at the same time the top earners that can work from anywhere have deceided to leave the country.

We need a goverment that acts now and not our lame duck goverment.

 

[liaconn]

So than what a responsible goverment should do is change that rather than participating in a ponzi scheme that was called housing market. Other nations are doing fine as a society of "renters", there is no reason why we could not do that here too.

I agree, but until the government start acting responsibly in this area they are pushing people into buying properties they can barely afford.

 

[Purple]

I agree, but until the government start acting responsibly in this area they are pushing people into buying properties they can barely afford.

No they're not. If people make bad/stupid decisions that's their own fault. They are not children and the government isn't their mammy.

 

[Latrade]

I agree, but until the government start acting responsibly in this area they are pushing people into buying properties they can barely afford.

Just out of interest, how can a government have a responsibility for a culture of wanting to be a home owner, inculcated over generations? There are many things that Cowen and Bertie should be dragged over the coals for, but I just cannot see the logic in saying this Irish need to own property and land is their fault or that the government would or could have any success in changing our views.

This need has a whole historical and cultural impacts behind it. It has nothing to do with how easy it was to get a mortgage. The banks facilitated this, but the need was and always will be there until collectively the nation changes its values on home ownership.

 

[liaconn]

Just out of interest, how can a government have a responsibility for a culture of wanting to be a home owner, inculcated over generations? There are many things that Cowen and Bertie should be dragged over the coals for, but I just cannot see the logic in saying this Irish need to own property and land is their fault or that the government would or could have any success in changing our views.

That is not what I said. I said that the Government has responsibility to ensure that the rental market is properly regulated. This would make renting a viable alternative to home ownership. At the moment, in this country, renters are very vulnerable and have very few rights. Therefore, it is not a position most people are happy to be in long term.

 

[liaconn]

No they're not. If people make bad/stupid decisions that's their own fault. They are not children and the government isn't their mammy.

No but the Government is responsible for regulating. See my post above.

 

[Shawady]

The main factor here seems to be that she fixed her repayments rather than go with a variable rate. If she was on a tracker, she would get the benefit of all the interest rate cuts and would go some way to cancelling her cut in salary.
The decision to go fixed cannot be blamed on the government. If interest rates had have gone up she would probably thought she had made a wise decision to initially choose a fixed rate mortgage.

 

[DerKaiser]

No they're not. If people make bad/stupid decisions that's their own fault. They are not children and the government isn't their mammy.

I have to make a rare objection!

I do blame people for their own decisions and the impact it has had on their lives.

But there is a certain amount government is responsible for. I'll illustrate.

1) Security. We could have no guards on the street and tell people that it's their own stupidity that got them beat up by being in town after dark.

2) Food. The EU operated a policy of subsidising farmers to give them a stable income to ensure stable food production and stable food prices.

3) Shelter. It's the government responsibility to ensure we have a sufficient supply of housing affordable to the majority (be it rents or ownership)

To the extent that house prices were completely out of whack with rents, I believe those who bought were responsible for their actions.

I do believe, however, that good government would have encouraged a culture of secure tenancies when it became obvious that people did not trust the rental market to the extent that they were prepared to value a house at 50 times its annual rent

 

[csirl]

I would not advocate policies which encourage that reduction in home ownership and expansion of the rental market, even if the rental market is properly regulated. Some posters have hinted that as rental is more common in some other countries, then we should place less emphasis on ownership.

What people fail to understand is that the proliferation of rental in a lot of European countries has a lot to do with their feudal pasts - where you have different classes of people - property owners, who are richer and more powerful and renters who, by virtue of their dependance, are subject to the property owners. We dont want to go down the road of having different classes based on property. Some posters may reply that some of these countries are now fully democratic and have come a lot way from feudal princes and lords, but the vestiges are still very evident and tied up in landownership.

It is perferable to have a system whereby people have access to a wide range of properties to suit their needs and budgets. Where home ownership is the norm for long term occupants. A rental market will always be needed, but it should be geared towards temporary residents, students, young adults starting out in life etc. and not viewed as a long term option for the vast majority of families.

 

[DerKaiser]

On reflection we would have been fine if the annual demand had stayed at the long term average of 30,000 or so units a year. The real issue we need to understand is why there was temporary demand for 80,000 units a year throughout the decade.

Maybe it was due to single 24 year olds suddenly believing that the norm was for them to have an entire house to themselves!!!

 

[UptheDeise]

Spot on she should not have got that mortgage.

Why? Because there is a chance she will not be able to pay it and will become a burden on the rest of society.

But she was not making that point, she was complaining that her standard of living wasn't all she wished it would be, and that much she is responsible for.

At the end of the day she has a number of avenues open to her such as taking in an extra lodger or selling to reduce her debts to a level she can service. But it seems that people would rather throw a public tantrum these days than show a bit of initiative.

We will probably have have over 600,000 people unemployed and 1,800,000 in jobs by next year with about 400,000 of those in the public service. We'll be in a situation where we'll almost have one person on social welfare or in the public service for every private sector taxpayer.

Is this sustainable? How can anyone in this country believe that a pensions levy amounting to 4% of net pay is something to wail about. Consider a 30% reduction in net pay and you'll be closer to where we are headed

Hi DerKaiser,

As a matter of interest where did you get the 400,000 figure for public sector workers? I thought it was 369,000? Do you reckon that the government will employ those extra PS people?