Book Chapter Details
Mandatory Fields
Kenna, P. & Lynch-Shally, K.
2013 December
Deshaucios y Elecuciones Hipotecarias (Evictions and Foreclosures)
Comparing Mortgage law in England and Ireland after the Crisis
Tirant de Blanch
Valencia Spain
Optional Fields
mortgage law, consumer credit, housing crisis
House prices have risen dramatically from the mid 1980s until recently in Ireland, Spain, the United Kingdom (UK) and the Netherlands1. Indeed, the UN Special Rapporteur on adequate housing has recently stated that market-based housing finance has contributed to a widespread bubble in real estate prices and a decrease in affordability across many parts of the world. The subsequent financial crisis and property price crash in many countries has resulted in significant levels of mortgage arrears, negative equity and repossessions by mortgage lenders. This chapter examines the situation regarding mortgage law in Ireland and England in the context of this housing crisis. While these two countries are somewhat unique in European in that they both have a common law legal tradition, supplemented by statutes, there are also significant differences in the approach of legislators and the courts. In both countries, a mortgage is regarded as a property right. A mortgage is a “real right in land created by the owner (mortgagor) entitling the mortgagee to payment of a certain sum out of the land with priority to other creditors on the forced sale of the property”. There are important similarities too, in terms of housing, with both countries experiencing sustained house price inflation up to 2008. The extension of credit in an inflationary context, based on inexpensive capital from increasingly integrated global and national capital markets created a major house price bubble. The bursting of the house price bubble led to a reversal of house price trends and exposed an indebtedness crisis amongst national mortgage consumers, manifest by increased arrears and repossessions. However, the scale of arrears in Ireland is more significant than in England, although the rate of repossessions is lower. The question arises as to whether difference in the extent of arrears and repossession is linked to differences in the national legal framework applicable to mortgage consumers. In Ireland and England, the rights and protections of mortgage consumers are contained in a variety of constitutional provisions and, primary and secondary legislation. This chapter identifies the nature and scope of existing frameworks in both markets. It also examines the comparative status of the mortgage consumer under contemporary national provisions.
Grant Details
Publication Themes
Applied Social Sciences and Public Policy, Humanities in Context