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Eviction moratorium has to be lifted, Monetary Council says

The Monetary Council agrees with the declarations of the National Bank of Hungary’s fresh Stability Report and suggests that the eviction moratorium enacted to protect indented homeowners unable to make timely payments on their mortgages is lifted at the earliest time possible. Recently the government has extended the moratorium until July.

Scrapping the moratorium, which otherwise increases the amount of non-redeemed loans, would mean an effective cleaning of the banks’ mortgage portfolios and as such it would have a major role in creating better loaning possibilities, the Monetary Council said in a statement added to the Stability Report.

At the same time, regarding the huge number of residential properties behind the non-redeemed loans, ending the moratorium could possibly cause tensions on the property market, the Council warns. Therefore, after fully terminating the eviction ban, new solutions would be needed in order to enable banks to cleanse their portfolios without pushing a huge number of properties onto the market, the members of the Council suggested.

The profitability of the Hungarian banking system was the lowest in the region, which reduces the banks’ ability for capital accumulation as well as their loaning activity and thus sets back economic growth, the statement added.