Builders Deposit Scheme is Anti Competitive.

The much hailed Builders Deposit Scheme, as an innovative home owner friendly initiative, has a nasty, nasty, jagged edge to it. It is essentially an anti competitive measure which will restrict competition creating a second market, with much reduced choice for buyers dependent on the Builder Deposit Scheme.

A purchaser with a bono fide 100% mortgage or a 75% mortgage with deposit saved, has a much broader choice from which to select property for purchase.

Not so with the builder Deposit scheme. It is only available to buy the Deposit Lenders Property. Essentially the company advancing the loan requires that you buy the property from them as well. This facet means that they can set the price as the buyers cannot buy from the open market.

It means also that property bought under the scheme will be worth less on the open market, since completion and choice is frustrated.

There is a clear conflict of interest involved where in the lender restricts the borrower to buying only the lenders property.

Some thing similar used to happen when employers required their workers to buy their goods from the employers shops and parliament enacted laws to prevent this abuse.

Is this not illegal in some way? Surely it deserves investigation by Primetime at leat to expose what is going on. You know I often wonder why we dont have programmes like Rogue trader and Watchdog in the Uk, lets be honest we certainly have the industries that deserve probing into.

My instinct tells me it would fall foul of the competition Act 2002 … index.html

*5.—(1) Any abuse by one or more undertakings of a dominant position in trade for any goods or services in the State or in any part of the State is prohibited.

(2) Without prejudice to the generality of subsection (1), such abuse may, in particular, consist in—

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions,
(b) limiting production, markets or technical development to the prejudice of consumers,

© applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage,

(d) making the conclusion of contracts subject to the acceptance by other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the subject of such contracts.

(3) The putting into effect of a merger or acquisition in accordance with the provisions of Part 3 of this Act, together with any arrangements constituting restrictions which are directly related and necessary to the implementation of the merger or acquisition and are referred to in the notification of the merger or acquisition under subsection (1) or (3) of section 18 , shall not be prohibited under subsection (1).*

I will make a complaint to The Competition Authority

Didn’t the Financial Regulator ask them for more information…

If they start making any noise over this, their patronage will be revoked and they’ll find themselves first in line for the chop.

I don’t really see anything wrong with it. It seems to be an aid by a developer to get people to purchase their property. Like that apartment development out in Tallaght that offered a free volvo with every apartment bought or a 0% finance option on a car. Maybe I’m missing something?

you didn’t have to give the developer anything for the volvo apart from the purchase price.

You probably had to pay 50k for the parking space though.