By: INÊS LOPES | ines.lopes@algarveresident.com
Letting out a property that is tied to a mortgage agreement, without being in breach of contract, may soon be a possibility, after the Prime Minister promised to look into the conditions lenders were imposing on borrowers.
PM Pedro Passos Coelho (pictured), speaking at a recent meeting of the Trabalhadores Sociais-Democratas (Social Democrat Workers), said alterations being proposed by PSD MPs meant a mortgage holder who wished to let out the property, “due to a job opportunity elsewhere, for example”, would neither be in breach of contract nor face a higher spread (bank profit margin) imposed by the bank for changes to the credit agreement.
The Prime Minister said it was no longer acceptable, particular under the economic crisis, that mortgage holders were letting job opportunities slip away because they were unable to let out the property for fear of rising financing costs. Furthermore, Passos Coelho said that after the proposal for changes is presented the “government would intervene in due time as there are aspects that require urgent action”.
Although he refused to describe what alterations were being discussed, as they were “MP initiatives”, he assured that the government would get involved in the debate, particularly with the ever rising unemployment level affecting Portugal and at a time when no obstacles should exist to hinder the search for job opportunities.
Referring to the alterations being proposed as part of the government’s active employment policies, Pedro Passos Coelho said the measure was now more pressing than ever.
He described a common scenario where an unemployed mortgage holder would not be able to accept a job opportunity away from home as selling the property was virtually impossible in the current market and letting it would represent additional costs imposed by the bank.
“Should an unemployed mortgage holder waste a job opportunity and wait until he cannot meet his financing obligations or should he grab it and be faced with a higher spread?” he said, adding that this type of obstacles was not encouraging economic growth.
“The problem is, at the moment any changes in a mortgage agreement would be seen as an opportunity for banks to increase the spread. But we need to create the conditions to help the unemployed grab job opportunities and return to the labour market,” he concluded.
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