We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.


Repossession of Irish homes to rise - but as 'a last resort'

Fitch Ratings said that the rate is to rise following the introduction of the Personal Insolvency Act, amongst other changes.

LONG-TERM RESTRUCTURING of Irish mortgages is to become more prevalent – and while we can expect repossessions, they will only be as a last resort.

That is according to Fitch Ratings, which says that long-term restructuring of mortgages in Ireland will become more prevalent. This is because since July the latest version of our Code of Conduct on Mortgage Arrears (CCMA) and the Personal Insolvency Act came into effect, and the Land and Conveyancing Law Reform Act passed into law.

Fitch said:

We expect tools such as split mortgages or trade-down products for borrowers in negative equity to be used first, followed by Personal Insolvency Arrangements (PIAs). Repossession or voluntary surrender will be a last resort.

Fitch stated that the Land and Conveyancing Law Reform Act reopens the repossession route, and it expects the number of repossessions to rise.

However, it believes this will create incentives for lenders and borrowers to agree longer-term alternative repayment arrangements.


In Ireland, lenders have started deploying longer-term strategies as the short-term arrangements common here – like principal payment holidays – have “often failed to restore borrowers to performing status”.

Plus, the central bank has set targets for lenders to achieve sustainable solutions for mortgages in arrears, noted Fitch.

The new CCMA should accelerate discussion of arrears problems between borrowers and lenders, and also limit the risk of reduction of willingness to pay.


Fitch said that discussion with lenders suggests they will deploy their own restructuring tools first, before moving on to a PIA if necessary.

They view a PIA as a niche product, most suitable where a borrower has various creditors and types of debt. We maintain our view that PIA is not an easy route to debt forgiveness, as it would be likely to entail relatively stern restrictions on living costs.

Repossession, meanwhile, will be the final resort, but all three options “are likely to involve losses for mortgage pools”.

The ratings agency said that trade-down mortgages may lead to a mild prepayment increase.

Read: New law removes legal gap preventing house repossessions>

Explainer: Who and what are Ireland’s sheriffs?>

Your Voice
Readers Comments
    Submit a report
    Please help us understand how this comment violates our community guidelines.
    Thank you for the feedback
    Your feedback has been sent to our team for review.