Jump to content
House Price Crash Forum


  • Posts

  • Joined

  • Last visited

Everything posted by Shotoflight

  1. Government hails latest GDP figures, but there is still room for scepticism over this 'glorious recovery' - UKhttp://www.independent.co.uk/voices/comment/government-hails-latest-gdp-figures-but-there-is-still-room-for-scepticism-over-this-glorious-recovery-9629812.html Most people would associate a recovery with rising pay and living standards. But wages are still considerably lower than they were in 2008. The average total weekly pay packet in May was £478. That’s 9 per cent lower than six years ago, when adjusted for Consumer Price Index inflation. And despite the GDP recovery and the fall in inflation to below the Bank of England’s 2 per cent target, wage growth is still extremely weak. In the three months to May, average pay increased in cash terms by just 0.3 per cent year on year. UK economy: Why aren't I feeling better?http://www.bbc.co.uk/news/business-28481996 The real household income figures from the Institute for Fiscal Studies don't make terribly cheerful reading for anyone. The income of the median household (that's the household for which half of households have a higher income and half have a lower one) has fallen by about £20 per week, after adjusting for inflation, since 2008. The household at the 90th percentile (that's the one for which only 10% of households have a higher income) has seen its income fall by about £60 a week. At the other end of the spectrum, the household at the 10th percentile has seen a £2 per week increase. So there is room for celebration, with the UK economy growing faster than its competitors and more people employed than before the recession. But falling GDP per head, real incomes and average earnings mean that many households are not yet feeling the benefits.
  2. http://your.asda.com/press-centre/asda-income-tracker-july-2014 The rate of growth in discretionary incomes in Northern Ireland slowed by 6.9 percentage points in the second quarter, meaning families have just £82 a week spare cash – the same as the past three years in this same quarter.
  3. Nama bids to ease bankruptcy fears http://www.belfasttelegraph.co.uk/business/news/nama-bids-to-ease-bankruptcy-fears-30447956.html The new assurances tell developers that their remaining debts will be wiped and they will be allowed to hang on to some of their wealth. The informal offers are only being made to developers who are seen to co-operate completely with the agency and who are reversing property transfers to wives, children and girlfriends. The promise is likely to ensure that Nama recoups as much money as possible for the Irish state but it is also likely to anger some taxpayers who believe that developers who owe tens of millions of euro should be forced to go bankrupt. They are also likely to be uneasy with the nature of the informal agreements, which do not give concrete guarantees about how much bust developers should be allowed to keep at the end of the process. Some developers are also likely to get increased bonuses as the price of commercial and residential property rises. Nama initially promised some developers a percentage of any proceeds from sales as an incentive to achieve high prices. As property prices pick up, these developers are now likely to see their incentive bonus rise in tandem with the rising property market.
  4. Perhaps not a big player here and NISRA states the current average is 4.2 income. Still, every little helps and the affordability might sting. It seems like only yesterday people were borrowing 9x (2007) Nationwide caps mortgages at 4.75 times incomehttp://www.bbc.co.uk/news/business-28429082 Nationwide is capping all new mortgages at 4.75 times the borrower's income and imposing a tougher affordability test. The move, which takes immediate effect, comes as concerns grow about mortgage lending fuelling a house price bubble. RBS and Lloyds have set a cap of four times income on loans above £500,000. And the Bank of England's Financial Policy Committee said that mortgage lenders should not have more than 15% of their mortgage lending at income multiples above 4.5 times. But Nationwide's new restriction applies to all residential lending. In addition, the building society will test whether applicants can afford a mortgage interest rate of 6.99%.It would not reveal the previous figure, but confirmed that the new "stress" test was tighter than before, in line with Bank of England recommendations.
  5. World buys into Ulster property salehttp://www.belfasttelegraph.co.uk/news/local-national/northern-ireland/world-buys-into-ulster-property-sale-30443144.html Buyers from around the world flocked to a Northern Ireland property auction – with real estate selling for up to four times its reserve value in a bidding frenzy.Everyone with a stake in the property market, from homeowners to estate agents, was left bruised by the property boom and bust, in which typical house prices fell by 50% from their 2007 peak. Surveyor Daphne Mahon from Lambert Smith Hampton (formerly BTW Shiells) said that the sales were an indication that confidence was returning to the property market in Northern Ireland.
  6. Workers getting poorer http://www.independent.co.uk/news/business/uk-unemployment-levels-at-lowest-since-2008-financial-crisis-9609756.html most people in work are still suffering, with average base pay rising just 0.7 per cent — the lowest rate since detailed records began in 2001, and well below the 1.9 per cent rate of inflation. TUC general secretary Frances O’Grady said: “It’s good to see unemployment falling, but with pay growth falling to a record low, serious questions must be asked about the quality of jobs being created in Britain today. “If all the recovery can deliver is low-paid, low-productivity jobs then Britain’s long-term economic prospects will be seriously diminished.”
  7. NI economic recovery still fragile, figures suggesthttp://www.bbc.co.uk/news/uk-northern-ireland-28324004 However, the Northern Ireland Composite Economic Index (NICEI), which is roughly equivalent to GDP, fell back by 0.4% in the first quarter of 2014. The Northern Ireland economy is still 12.7% below its pre-recession peak whereas the UK has now made up almost all the output that was lost during the recession.
  8. Northern Ireland 'was hardest hit' during UK recessionhttp://www.bbc.co.uk/news/uk-northern-ireland-28301277 Northern Ireland suffered the UK's largest fall in household incomes and the biggest rise in poverty during the recession, according to research. The details are contained in report produced by researchers at the Institute for Fiscal Studies, on behalf of the Joseph Rowntree Foundation. It shows that the typical household income in Northern Ireland fell by 8% during the recession, compared to a 2% fall in the West Midlands. The report states that Northern Ireland started from "a relatively low base" in the pre-recession period, with typical household incomes already 6.5% below the UK as a whole. It adds that the recent falls have "exacerbated this disparity", leaving Northern Ireland 10.2% below the UK as a whole. The report examines household incomes using both a "before housing costs" measure and an "after housing costs" measure. Housing costs are mortgage and rental payments. On both measurements, Northern Ireland suffered the steepest falls
  9. Young hit hardest by recession, says IFS - UKhttp://www.bbc.co.uk/news/business-28305804 Only 21% of people born in the 1980s had bought their own house by the age of 25, compared with 34% of those born in the 70s and 45% of those born in the 60s.
  10. House price inflation hits 10.5%, says ONShttp://www.bbc.co.uk/news/business-28296536 Prices were up in every region, except for Northern Ireland, where they fell by 0.7%. (Month of May)
  11. Inflation in sharp rise to 1.9% in Junehttp://www.bbc.co.uk/news/business-28308837 The pound jumped against the dollar following the inflation figures, climbing as high as $1.7144, around three quarters of a cent higher on the day. Inflation as measured by the Retail Prices Index (RPI), which includes housing costs, rose to 2.6%, up from 2.4% in May. "The news will further fuel expectations that the Bank of England will start raising interest rates sooner rather than later, with November looking the most likely month for the first hike," said Chris Williamson. chief economist at research firm Markit. "Inflation is now rising at its fastest rate since January, with clothing, food and transport contributing well," he said. However, for people who have been living with below inflation wage increases, "the situation just got a little more painful," he said. Wage rises began to match inflation in April, after six years of falling real wages. But the latest figures show wages rising at less than 1%, well below the 1.9% rise in prices recorded in June, meaning household incomes are being squeezed again.
  12. Northern Ireland's economy 'has been in recovery for a year'http://www.bbc.co.uk/news/uk-northern-ireland-28300294 The construction sector has seen the fasted rates of growth in the PMI in recent months. Mr Ramsey said this was largely to do with firms winning work outside of Northern Ireland rather than as a result of a significant pickup in activity locally.
  13. Northern Ireland Housing Bulletin 1st January – 31st March DSD http://www.dsdni.gov.uk/january_-_march_2014_internet_copy.pdf The total number of new dwelling starts was 1,993, an increase of 14% (239) on the same quarter in 2013.  The total number of new dwelling completions was 1,818, a decrease of 9% (186) on the same quarter in 2013.
  14. This is borne out by the NISRA report. Sales increasing from very low levels in recent quarters and prices still 6% below 2005. Sales (4,000 odd per quarter) will have a long way to go to match the 11,000 per quarter in 2006. Down Recorder front page 'reports' "Houses are selling as property slump ends" - houses booked off plan, snapped up, prices rising at 8.3%, new build sales buoyant, confidence back, buyers returning 'en masse', sold out within hours, long list of potential buyers etc. etc. etc. ". Apparently 10 of the remaining 28 Quoile Terrace (Meadowlands) development (the classic ghost development) have been booked by word of mouth. Sale price not given, but EA states they will go on the market for £109,000 - £66 per square metre rather than the average £100, says the EA. He goes on " A builder could not build these houses for the current sale price, but by the end of the year we expect to be getting more typical prices for them". The paper states EAs have reported first time buyers are driving the new 'surge' in activity enticed by 'keen' prices and the affordability of co-ownership............... "Things are brilliant" says Mary Lou Press (EA) All the lazy dog whistle verbiage present and correct in what should be called, in their own language, an advertorial! To infinity and beyond............................
  15. NI house prices 'could take 10 years to recover', says reportCould??? and what is this fixation with 2007 prices (or boom time levels as the report calls it) - universally accepted as 'mad' and 'unsustainable' ? http://www.bbc.co.uk/news/uk-northern-ireland-28213123 Property prices in Northern Ireland could take at least 10 years to recover to what they were before the market collapsed, according to a report. Business services firm PricewaterhouseCoopers (PwC) said that prices are still around half of their peak values in August 2007. This despite a recent "modest recovery" in prices. Average prices in Scotland are 5% below peak and 3% in Wales. PwC said Northern Ireland's "depressed" property market, high levels of negative equity and low levels of disposable income mean a slower economic recovery compared to the rest of the UK. The report also suggested house prices in Northern Ireland will rise by almost 5% this year. However, it expected growth to slow towards 2020 meaning it could be at least 2024 before prices return to boom time levels.
  16. Developers to build affordable homes - alongside, presumably, the standard unafordable homes! Abdication of responsibility? Social engineering? More meddling in the 'market'? http://www.belfasttelegraph.co.uk/business/news/plan-for-discount-northern-ireland-homes-may-need-a-healthier-marketplace-30412439.html Two features are dominating the current housing market. First, many households feel less able to consider buying houses, possibly to trade-up to new units, because they are now in negative equity. When an existing property has to be sold at a price less than the outstanding mortgage, negative equity becomes a constraint. Second, house builders now find it is more difficult to earn an acceptable profit, particularly when compared with the profit margins of seven to eight years ago. In a development, the affordable homes would be built to the same standards and appearance of normal private sector developments. However, the affordable homes would be transferred, or sold at significant discounted prices, to new intermediary landlords (such as the Co-ownership Association or one of the housing associations) and then made available to tenants at rents set below the levels in the private sector. Effectively, building affordable homes would reduce the profit that a developer would earn because of the compulsory earmarking of affordable homes. The obvious knock-on effect could be that a developer would try to sell other houses in the private sector at slightly higher prices. The minister, in the consultative papers, refers to imposing the cost of affordable homes on the builder where the builders profit was greater than 15% of turnover. At lower projected levels of profit, the scale of affordable housing might be negotiated on a reduced basis. The best estimates of the housing need in Northern Ireland point to a continuing shortage of houses available at affordable rents (even when the impact of housing benefit is acknowledged). To reduce the shortage the minister has also concluded that, whilst housing associations may take on more contracts, the extra affordable homes strategy can be implemented with little cost to the taxpayer. Private sector house buyers will, indirectly, subsidise the emergence of more affordable homes. http://www.dsdni.gov.uk/index/consultations/consultations-developer-contributions-for-affordable-housing.htm
  17. Don't get me wrong, I'm sure there are many cases deserving of sympathy and many consequentials in terms of finances, worry, health, lost opportunity etc due to poor decision making, advice or percieved necessity. But that goes the other way for people who (for one reason or another) stayed out of the market perhaps feeling they could have been, under different circumstances, providing more suitable accommodation for themselves and their families but unwilling to take a mortgage 9 times their salary or IO. Perhaps there needs to be pain for gain if the market is to move from dysfunctional to functional and perhaps this reset should happen sooner rather than later to lance the boil and release the poison. I don't detect any appetite for this from policy makers or politicians, so we fester with sticking plaster solutions which just prolong the agony and potentially make things worse. At least the report shines some light on the current situation. Telling (many of) those caught up in the bubble that it was their own fault for biting off more than they could chew will not, I predict, be one of the report's conclusions. After all, the taxpayer helps those, by way of the NHS, who make poor lifestyle decisions - smoking/drinking/obesity - perhaps poor financial decisions are deserving of similar taxpayer support? And perhaps I shouldn't be so smug/prescriptive? But it is a big bad world out there and actions, especially where risk is involved, inevitably have consequences.
  18. Was momentum not an incentive/inducement - allbeit a form of insurance policy protecting the 'value' of your 'asset'?
  19. An interesting read. 80% of apartment purchasers were investors - they estimate.
  20. Husband and wife developers are disqualified from doing businesshttp://www.belfasttelegraph.co.uk/business/news/husband-and-wife-developers-are-disqualified-from-doing-business-30409871.html Husband and wife Kieran Paul (51) and Jacqueline Burns (49) of Crieve Court, Newry, were disqualified for seven years and two years respectively following their conduct as directors of construction and civil engineering firm KB Developments Limited. The firm entered administration in August 2011 owing £2m. Mr Burns was found to have permitted the firm to lodge company funds to a non-company bank account in the company name, putting them beyond the reach of a secured creditor. Mrs Burns was said to have allowed herself to be recorded as a director without undertaking the duties the role entailed.
  21. Take responsibility for their own actions. And perhaps learn from it, as others should. i'm afraid I don't have all the answers. I do know I was in the market to buy a house during that period but, presumably like many others, didn't (perhaps more due to luck and circumstance than judgement). I wouldn't like to be in that position - neither would I expect the taxpayer or govt policy (at the expense of others) to bail me out or to be saved by another bubble and wave of unfortunates. Perhaps the only answer is stability, a change of mindset and responsible govt actions and policies. And perhaps this is totally unrealistic.
  22. The law on renting needs changing: it's far too easy for landlords to evictA tenant evicted after complaining about a plumbing problem lost his court case, but each year tenants do suffer 'revenge' evictions. This has to stop http://www.theguardian.com/money/blog/2014/jul/05/change-law-on-renting-and-evictions
  23. The landlords have been facilitated by Government policy and huge numbers of 'amateurs' tempted to engage. Low interest rates, not building social housing, trashing pensions, tax breaks, Rates discounts, housing benefits providing a floor in income (paid direct to the landlord), Support for Mortgage Interest (SMI), Government supported forbearance and a reluctance to reposess, Help to Buy etc. feed into the actions of the public and policy encourages home ownership (with attendant stamp duty reciepts) as it is an asset on which debt can be gained to boost confidence and 'the economy'. Mortgage debtors must be protected at all costs, Cameron has repeated this ad nauseum and by action. All others, the prudent, the young, savers are arbitrage and collateral damage and an election looms. Bleedover from the Republic's attitude to debt and houses did not help. NIHE/DSD income from the right to buy scheme may have coloured their view and this income stream (taken for granted?) impacted on and influenced future spending plans. On the other hand, Housing Associations were paying £170k for ex NIHE houses now going for around £50k and were also buying into other new build estates. How badly have these organisations been burnt and how positive, or otherwise, was their role in respect of inflating prices? No doubt brokers, finincial advisers, EA's (and word of mouth) advised people of this route and banks facilitated with niche (and broad) products and lax lending (IO, self cert) and checks. The taskforce should examine current and previous policies, including encouraging home renting/ownership through the DSD sub prime co-ownership scheme before drawing up further policies to mitigate the results of their previous, obviously disastrous, approach. Apportioning blame however, and learning the lessons that would go with this approach, is presumably off the agenda given the membership (banks & other lenders noticable by their absence) of the taskforce and whilst the report is certainly an eye opener, it would have been much more robust and effective if representation and terms of reference were wider. The report appears to be a 'sit rep' or a 'We are where we are' report - used where parties want to move on and disregard an uncomfortable past - rather than apportioning blame (cuase and effect) where it is due, though it has to be said a large portion of blame lies with those that were greedy and didn't know, or care, what the impact of their actions could be - even with transactions signed off, and encouraged by banks, solicitors, EAs and crucially government policy (mortgage debtors and developers alike). Pension funds investing in property, sales to those from other jurisdictions and the roles of credit unions and the likes of the PMS would be worth a look and of course the financial, reputational, emotional and social cost of this disaster zone would be illuminating. The role of the media is another crucial facet. At present the whole rotten fiasco is too much of a dirty little secret where many were involved but are now lying low, ashamed and embarassed (wishful thinking, perhaps) by facilitating or partaking, hoping it will all blow over if we just wait long enough, ostrich like - until the next time. Or, God forbid, govt meddles further. Most members of this forum should not be surprised, even after a period of 'consultation' where the vested interests will make their voices heard loudly, that any recommendations emanating from this report will be for the benefit of "the housing market" as a whole where those involved with a financial interest are as guilty as the gambling public of viewing houses as units or assets rather than homes and where the needs of society (social development) are subjugated to the needs of business, the reckless, the feckless and the greedy. Further house price falls will not be on this taskforce's radar, which they would probably see as a disaster rather than a necessity. They will probably conclude more affordable housing needs to be built. And the report will then gather dust. The members of the Taskforce are drawn from: Department for Social Development, Department of Justice, Council of Mortgage Lenders, Consumer Council NI, Housing Rights Service, Northern Ireland Housing Executive, The Law Society, Royal Institute of Chartered Surveyors, Landlords Association NI and Queen’s University Belfast. I was half joking earlier when I stated HPC didn't get a mention. The taskforce members could do a lot worse than skim this site - for balance, if nothing else. The Channel 5 show "Can't pay, we'll take it away" would also prove informative in relation to the lengths people will go to to cling on to cars, boats and houses that they cannot (or will not) pay for, and which therefore do not belong to them. The odd hard luck story, but the word "insurance" against illness or job loss for example, rarely makes an appearance.
  24. Property: Negative equity severe threat to NI’s recovery http://www.belfasttelegraph.co.uk/business/news/property-negative-equity-severe-threat-to-nis-recovery-30405324.html Case study: 'They demanded money that I didn't have' http://www.belfasttelegraph.co.uk/news/local-national/northern-ireland/case-study-they-demanded-money-that-i-didnt-have-30405885.html Another couple, Laura and Alistair Bushe of Ballywalter, are "riding it out" until the value of their house returns to its purchase level of £165,000 at the peak of 2007. Laura said not long after they bought their home prices soared to £200,000 – but its value has since fallen to around £100,000. "We are happy here so we'll just wait until the price goes up, so it's just a waiting game," she said. Good luck with that.
  25. Forbearance (vulnerable to interest rate rises - others with negative equity locked into svr and cannot push for better terms) Conversion to interest only (IO) contracts has been a key feature of lenders’ initial response. Within NI this migration has been particularly prevalent and the region has the highest rates of conversion to IO terms in the UK (Experian, 2013). However, due to concerns over the sustainability of this option, IO forbearance is becoming harder to secure. Young and old will suffer most in a 2.5pc world By pandering to imprudent state and personal borrowing policymakers have shown scant regard for the prosperity of Britain's least indebtedhttp://www.telegraph.co.uk/finance/personalfinance/savings/10937500/Young-and-old-will-suffer-most-in-a-2.5pc-world.html Forget earning 5pc on your savings when our economy returns to rude health - the "new normal" will be half that. And as you digest the meaning of that number for your own finances, consider also the cruel long-term effects on the two groups in society with the least debt - the young and the elderly. Both groups have, in effect, been financially maimed by a debt binge undertaken by others during the precrisis years. Young people have been locked out of the housing market; older people have been permanently condemned to pitiful returns on savings.Rates must remain rooted for a simple reason: Britain's collective profligacy. We have borrowed - and spent - far too much. A fifth of British households now have mortgages worth four times their incomes. Personal debt in Britain is now nearly £1.5trillion. At around £28,700 per adult, that is more than the average salary. The Bank surmised that raising rates too high, too fast would lead to catastrophe. If rates hit 3.5pc, it said, a fifth of British households would have to curtail spending "significantly". So policymakers will instead pull up a financial drawbridge. The Bank will protect those indebted to the hilt because our economy, now overly reliant on consumerism, cannot afford to make destitute great throngs of shoppers. Millions will be left stranded. Take older savers whose mortgages have been mostly cleared. Many have since 2009 downgraded retirement plans as funds set aside for old age generate only meagre returns. Others are tied into woeful pension incomes because of policies to support borrowers, such as the "QE" money-printing scheme. By pandering to imprudent state and personal borrowing - and failing to develop policies to tackle the resulting imbalance - policymakers have shown scant regard for the prosperity of Britain's very old and very young.
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.