Blog – David McCarthy – Galway Talks, 25/07/2013

galway-bayfmIssue:  First property price rise since 2008 sees an increase of 1.2% nationally in the year to June 2013.

Comment:  Any increase in property prices is certainly a welcome development.  Recent statistics show that there has been a slight increase in mortgage lending.  However, in order to see this trend continue, a greater level of first-time buyers need to enter the market. The statistics do not show the increases in the Galway area but it is to be hoped that we have benefited from the overall trend.

Issue:  No update from the Central Bank on review of Payment Protection Insurance scandal. 

Comment: As I mentioned last year the Central Bank is conducting an intensive review into the sale of Payment Protection Insurance by all banks.  These products were generally sold in conjunction with personal loans, credit cards and mortgages.  Essentially PPI was supposed to provide cover for the borrower in the event of death, sickness or redundancy. 

However there have been considerable problems with the operation of these policies and a very poor claims experience for customers.  The Central Bank has determined a lot of these policies were missold, in that they did not suit the individual’s circumstances. The review that is ongoing is to determine how many policies were missold and how much compensation needs to be paid to policyholders by the various institutions. 

I sincerely hope that this matter can be concluded by the end of the year as it has been dragging on for quite some time.