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AIB HAS ANNOUNCED that it will not pass the recent interest rate cut by the European Central Bank to its customers.
David Hodgkinson, Executive Chairman of AIB, announced the decision to the Taoiseach and Finance Minister this afternoon.
A spokesperson for the bank told TheJournal.ie that AIB “hadn’t passed on the past two rate increases” by the ECB and, similarly, would not be passing on the cut.
He said that AIB’s rates were “under review” and pointed out that the bank had not altered its interest rates since August 2010.
In response to the ECB’s announcement, two banks operating in Ireland have decided to pass the cut on to customers: KBC Bank Ireland and Permanent TSB.
KCB said that both tracker and variable rate mortgage customers will see a decrease of 0.25 per cent in their mortgage repayments from 1 December. Permanent TSB also said it would pass on the cut in its variable and tracker mortgages, and would introduce a new variable rate of 5.44 per cent on 2 November.
National Irish Bank said it would not be adjusting its standard variable rate but would pass on the cut to tracker mortgage customers.
The position of Ulster Bank and Bank of Ireland on the matter is still unknown.
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I think a creative greedy landlord tax would influence them to offer lower rents to businesses.
Seems incredible that the rental reviews are upward only and ridiculously detremental to business’. As usual FG fall short of a pre election promise. They were a shoe in anyway I don’t know why they bothered promising anything especially something that was constitutionally questionable.
In this country if it hits the very wealthy, holds white collar criminals to account, or levels the field away from the crony business friends of FF/FG, then it is always unconstitutional or there are legal difficulties.
Have a referendum on this, at the same time as the Seanad one next year.
Unfortunatly They are right in saying its un constituional to adjust an existing or lease but maybe they could leglistlate on new leases being created now and going forward cant be adjusted either way
Ive always taught upward only rents made no sense why as a business would you sign a lease for 25 years that no matter how the economic climate is you would have increased rent
Can’t make up my mind which of FG and Labour is more worthy of contempt in their cynical grab for power. Probably Labour by a short head. Hypocrites!
Victorian Legal deference at a time when flexibility is called for. This would be the smart economy in action then?
Have they cited any particular clauses in the constitution that prevent laws that would abolish upward only rent reviews
I’ve searched the constitution and can find no mention of rent
Either way, one would presume that they got legal advice before the election regarding the possibility of abolishing upward only rent reviews..so let them publish that advice and let them publish the advice that they are getting now that they are in government. ( where it’s likely the same people are advising them )
Privity of Contract in common law and property rights under the constitution.
Ta Peter I’ll take a look
What about a greedy retailer tax? These contracts were entered into between two willing parties and the retailers were more than happy to rip off consumers while they could get away with it. Most of the people paying these leases are multinational corporations who can well afford them. Let the market prevail….
Circumstances change, many landlords are happy to blight our shopping districts with empty units rather then take a hit. Fuck ‘em.
I’m not a constitutional expert but I certainly feel like raids on pension fund savings ought to be unconstitutional as well but the government went ahead anyway.
The government showed that they are good at flying kites about the budget so why not introduce the legislation, let it go to the courts and argue that upward only rents infringes the rights of the tenant. Then the courts decide.
Given that most of the properties on Grafton Street and lot of other prime commercial properties are owned by Pension funds, would introducing this legislation not be another attack on pensions? Upward only rent reviews should never have existed in the first place, but that doesn’t mean you can just tear up a legally binding contract. The same goes for Section 23 tax allowances. They shouldn’t have been introduced but that doesn’t mean we should punish people who invested in these properties. If the government keep threatening to retrospectively change legislation, how can international investors ever feel confident investing in Ireland? Over the last couple of years, there have been very few transactions in the commercial property market, despite very handsome yields. This has been due to constant threats from the government to try and interfere in private contracts. Hopefully, now that FG/Lab have admitted that they can’t do this, we may say more transactions in the market which will result in much need tax revenue for the government.
I would agree with you Dermot, but the slim chance of making some tax commercial property transactions is just that. slim.
Landlords are content to sit back and turn areas into slums rather than readdress the rent clauses. This cannot be allowed as it affects the ‘greater good’ rather than the possibility of tax from a sale.
The real reason the market is stalled is simply because its stagnant, its not from threats from government.
In fairness, if it is unconstitutional based on the AG’s advice then there is nothing the gov can do legislation wise.
However if we are going to have a Constitution Day next year with several proposals put forward, then possibly one could be to deal with this e.g. an article stating that upward only rent reviews are prohibited.
Rent is a huge cost to any person or business. My rent is 26% of my income while I think they said the nationwide average was 14-16%. This is ridiculous that wages are hit, prices are hit, everything is hit but the rent. I don’t care if its unconstitutional, if it is then the constitution is wrong. Whatever rule would have been written to protect people, not as an excuse to exploit people. How date rents stay the same when everything and its mother is cut.
The government lied to us on this to get votes. This Nama wheeze is a smokescreen. It’s about protecting vested interests and to hell with the small businesses struggling with celtic tiger rents. If its so easy to raid private pension funds the law could be amended on his issue also.
If necessary, change the constitution.
Watch for many retailers, who were awaiting the fulfilment of the promise made in the programme for government, going bust in 2012. More jobs and businesses lost while the obscene pensions and salaries to fat cats remain.
Politicians promises shown to be worthless again.
It is time to take a good look at our Constitution and do a bit of weeding.I has to be secularized and updated to protect the needs of the citizens of present day Ireland.
Yet another Fine Uturn from Edna’s army…
I’m sorry but I have to wonder about retailers, many have been seen North of the border in the past year buying such things on offer as tins of biscuits and sweets and of course booze to sell on down South. Then there’s our hoteliers who ramp up their prices when there’s a concert on and rip people off or the likes of certain airlines who wait for sports fixtures to be announced and shoot their fares up. A friend of mine took a picture of a politicians business down the country during the Summer, he had a sign out asking everyone to support local jobs and buy local as everyone up and down the country is doing, but when my mate went into this business there were two eastern Europeans behind the counter. So much for supporting the local economy. Retailers cry poverty, and I’ve no doubt many are pushed to the pin of their collar, but many more take every opportunity to screw us every chance they get and I’ve no sympathy for these.
The answer is simple. Let the market decide. If rents are too high for retailers to make a profit, they will go out of business and another business will take their place. The circle of commerce will continue.
Rents ALWAYS follow the market. No need for Government interference.
Rent has not followed the market in 3 years paul so thats a rubbish statement to make. It ‘follows the market’ in prime locations while murdering small business everywhere else. And there arent other businesses there to take over the leases.
they can get around contract law by imposing a 99% tax on all rent increases while the economy is in recession. Also, they need to remove the surveying and auctioneer profession from the arbitration process. They have a vested interest in prices rising.
The Irish government’s decision to renege on their program for government
policy to allow commercial tenants market rents,was the worst economic
decision since the infamous bank guarantee. It has ensured the destruction of
tens of thousands of sustainable Irish businesses and jobs and the
creation of a damaging two-tier commercial rental market. The government
have aligned themselves with the commercial property cartel to ensure
the Irish commercial property market will not recover and this will
further damage the Irish economy. Any cost/benefit analysis would
clearly show the error of this decision.
This government still believes the propaganda of the property industry,
the exact crew who wrecked the country. The economic logic is -if you
massively over-rent commercial tenants until you destroy their
businesses and jobs -this will help the Irish commercial property market and
increase the value of Irish commercial property. This is one of a hat trick of
disastrous Irish government decisions, the first was to allow the
creation of the greatest property bubble of all times -second to
guarantee all Irish banks liabilities and -third to allow all commercial
tenants to be be bled dry by massive over-renting using ruinous Irish
commercial lease law.
This is complete nonsense from Noonan. There is no requirement for him to introduce retrospective legislation. He could easily implement something that covers new leases only. It would still leave lots of tenants in difficulty but the gradually increasing competition from a new and fairer tenancy regime would incentivise landlords to stop this rack-rent practice. The truth is Noonan is, like Fianna Fail before him, protecting the big property developers and landowners – and propping up NAMA by keeping rents as artificially high as possible. This is isn’t capitalism, it’s extortion. Commercial tenants should organise a nationwide rent strike to force the government and the property sector to come to their senses. We are all paying for this in higher prices – one more way in which the property sector is being helped to monopolise disposable income to the serious detriment of the whole of the rest of the economy.
Rent has followed the market where business gets organized and refuses to pay. The problem for most SME’s is that they operate alone and limp along. It’s kept quiet because landlords don’t want their tenants knowing that they’re doing deals. If more businesses had the bottle to offer landlords a simple choice. 20% reduction on rent or you’ll find yourself with an empty premises, you’d see more change. Landlords are businesses too and when confronted with their position (upward only) and their interest (continuous rental income) they will vote with their interest.
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