Yesterday Financial Services group IFG launched a Home Price Protection (HPP) Plan that will protect buyers against negative equity arising from future house price falls.
Speaking at the launch of the new product the Chairman of IFG Ireland, Frank Ryan, said, “All of our research tells us that a major contributing factor preventing potential purchasers holding off buying a home is the fear of falling property values. There is a clear need for the consumer to be protected against the potential for negative equity when buying a home.”
The HPP Plan is designed to protect the homebuyer against any loss suffered by a subsequent fall in property values. IFG’s product requires the vendor of the property to defer up to 20 per cent of the purchase price for as long as four years. The deferred payment is made into an independently managed trust. If the value of the property stays the same or rises, the money is paid to the vendor. If it falls, it is reimbursed to the purchaser after the trustee independently verifies the value of the property using the Central Statistics Office monthly index.
IFG has said its new homebuyers’ product to insure against future house price falls could be used by Nama instead of – or in conjunction with – its own deferred payment product aimed at kickstarting the property market.
The IFG Home Price Protection Plan can be applied to houses or apartments; new or second hand properties; a specific percentage of the purchase price; and for a specific length of time.
Have your say: Protection against future property price drops
- Could the Home Price Protection Plan help kick-start / revive the property market?
- Would it help restore consumer confidence in the property market?
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