‘No answer’ for bypass homeowners in negative equity
Families with homes in negative equity living along the pathway of the emerging preferred route of the new bypass fear financial ruin if the road goes ahead.
Some 41 homes face demolition, 10 will be severely negatively impacted and scores more homes are in close proximity to the proposed new road from Barna to Briarhill.
Homeowners living in negative equity – where the mortgage is greater than the actual market value of the house – are terrified of losing out on the double, if they are forced to sell by way of Compulsory Purchase Orders (CPOs).
Many of the houses that face the wrecking ball were purchased with borrowed money and were paid for when property in the city had much higher values. If families are forced to sell, they fear ending up without a home, and being left with massive debts, and no money to buy a new home.
Proponents of the project have conceded that the scale of property crash, which resulted in house prices plummeting, could lead to ‘hard luck’ stories during the CPO process.
It is a problem that hasn’t arisen before, however, and it is not known if there will – or can be – a fair solution found to solve it.
“I have no answer to that,” conceded a senior official working on the project.
“Up to now all we would do is CPO the house; we’d never know what they paid for it. CPO is based on market value. What you are paid is market value for the house and maybe you will get a premium for disturbance.
“It has never happened before that house prices have crashed by over 50%, so you’re going to get some hard-luck stories.”
For more on this story, and further bypass coverage, see this week’s Galway City Tribune