Madam, - House prices have little to do with the cost of building and much more to do with how much money can be borrowed for house purchase.
Up until about 1990 there was a universal rule operated by lenders both here and in Britain whereby the maximum ordinary house mortgage loan obtainable was calculated solely on the basis of one salary. This set a ceiling on the price of the average house.
Around 1990, with increasing numbers of women starting to work outside the home, lenders started arranging mortgages based on two salaries. Within four or five years, house prices had doubled, to the delight of estate agents, builders, developers and landowners. As the economy prospered, house price inflation continued.
The social effect of this was profound. Single-income families soon found themselves unable to raise enough to buy modest homes, and to be increasingly left at the mercy of the poorly regulated rental market.
Even where a mortgage can be raised, both parents are frequently forced to work outside the family home, resulting in many children being raised by other than their parents.
Is the present building recession an opportunity to restore some order and common sense into housing loan conditions and gradually to enable ordinary, single income families to buy their own homes? - Yours, etc,
MARTIN McDONALD, Liosbourne, Carrigaline, Co Cork.