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Everything posted by Shotoflight

  1. Royal Bank of Scotland caps risky mortgages Government-owned lender follows Lloyds in introducing loan-to-income limits on mortgages above £500,000 http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10873249/Royal-Bank-of-Scotland-caps-risky-mortgages.html
  2. UK Britain is still feasting on credit – and the next crunch will hit in 2016Interest rates won't stay low for much longer. When the cheap loans end the result will be red-letter bills and repossessions http://www.theguardian.com/commentisfree/2014/may/30/britain-feasting-on-credit-crunch-hit-2016 Which is what makes spring 2016 so important, because while likely to be still early in the slow uphill march of rates, that's the point identified by economist Matthew Whittaker as being "crunch time" for Britain's indebted households. As chief economist at the well-regarded Resolution Foundation, Whittaker has probably spent more time than anyone else in the country analysing what higher borrowing costs could mean for Britons. His predictions are frightening. Should the key rate hit 3% in 2018, as the market and the Bank's Bean predicts, then about one in three of all mortgaged households will find themselves dangerously stretched. Within that group, Whittaker identifies 770,000 "mortgage prisoners" – households who, perhaps because they're self-employed or have low equity in their homes, will find it very hard to remortgage on to a cheaper deal. What he's describing is a second credit crunch – this time primarily affecting ordinary consumers, rather than banks or businesses, and kicking-in in just two years' time. The Resolution Foundation avoids sketching out what the human implications of this consumer credit crunch might be, but they're not hard to infer: red-letter bills, forced sales of homes, and a rise in repossessions. All this at a time when the bulk of Osborne's austerity programme will be pushed towards completion. In its Financial Stability report last November, the Bank of England noted that 16% of mortgage debt is owed by households with less than £200 left over each month after paying their essential bills and groceries. Imagine such a household has a £100,000 mortgage on a 3.6% variable rate. As the rate goes up in line with the base rate, their monthly mortgage bills will rise from £506 to £644. Between now and Christmas 2018, they'll have paid something like an additional £4,400 solely on home loans. All that before you look at any other debts or financial mishaps they might have. Looking at these figures, some might say this is the fault of the feckless, of those who wanted newly built flats, German kitchens and exotic holidays during the boom but couldn't afford them. That ain't necessarily so, for three main reasons. First, as estate agents say, location matters. Look at Northern Ireland, where Whittaker thinks around 70,000 households face mortgage imprisonment. A lot of those people will have taken out perfectly prudent home loans in 2005, 2006 or 2007 – it's just that their properties have halved in value from their pre-Northern Rock peak.
  3. Affordable housing contribution out for consultationhttp://www.bbc.co.uk/news/uk-northern-ireland-27682152 Private housing developers will be required to make contributions towards the building of social housing under proposals from the Department for Social Development (DSD). It is proposed the 'affordable housing contribution' would apply to all developments of five homes or more. The developer would also have to be able to make a profit of 15% before the contribution would apply.
  4. Yes to the question but only part of the jigsaw. Interest rate rise noises rumbling like thunder in the background. People continue to get poorer on average - wage rises against new CPI inflation - and no return on savings Student loans coming to the fore A fractured increasingly part time, zero hours, grant aided, benefit supported, public bloated, self employed workforce, many with a high debt appetite and many with high debt/negative equity. Usual local political nonsense, irrespective of grant aided call centre jobs, sending negative vibes to the wider world. Wider political instability/uncertainty nationally in next 12 months Any big national (BOE) sticks waiting in the wings to beat down london bubble (in addition to the likes of Lloyds restricting lending multiples) to feed in here locally - common sense to ripple out Still getting my head round the thousands that were paying, and allowed to, 9.1 times salary in 2007. I hear what the RPPI is saying - 7% rise in past 12 months (though belfast dipped 2% last quarter) but I'm not sure what fundamentals support this burst of confidence/sentiment. I'm also not seeing many houses (apart from the lower end, and even then.......) coming on at close to the 2005 price less 6% at which, apparently, the average house sells. Don't live in Belfast but I'm not getting any burst of optimism here - still plenty renting till the 'market improves - won't give it away' and a few chancers coming on at aspirational prices. Still seeing price drops and repos. And this is 'the busy spring/summer period'. Perhaps cash sales/investors playing a part? Estate agent survey, through UUJ continue to have an average of £135k - on NI wages???????? And where are the rest of these cuts?
  5. Home debt write-offs by bank welcomedhttp://www.independent.ie/business/personal-finance/home-debt-writeoffs-by-bank-welcomed-30318421.html Permanent TSB is testing the new scheme, which could offer a way out of a debt mire for thousands of people. Over-stretched borrowers are to be given a chance to clear their debts if they sell their properties and pay what they can of the outstanding balance. The bank is prepared to write off much of the balance owed when the property is sold if a deal is reached on paying back some of the outstanding amount. This is a the nearest there is to "jingle mail" in this country. That is the US phrase used to describe over-burdened borrowers handing back keys.
  6. 4.2 times median gross salary in RPPI for NI CML states over half are ftbs @ 2.91 - so the rest must be pretty high to bring it to the RPPI 4.2? UK average, according to CML = 3.42 (presumably including London) Perhaps each use totally different metrics. Lloyds cutting off loans above 4 times salary (£500k/London) http://www.bbc.co.uk/news/uk-northern-ireland-27599715
  7. Survey of EAs 1.3% rise over 12 months, with rental 'data' included (in collaboration with UPS) and mentioned elsewhere http://boini.bankofireland.com/about-boi-group/financial-news/house-price-index/item/44/#house-price-index
  8. http://www.rte.ie/news/business/2014/0528/620131-property-prices/ New figures from the Central Statistics Office show that residential property prices nationwide rose by 1.4% in April. This compares with a fall of 0.7% in March. In the year to April, residential property prices nationally increased by 8.5%, up from the 7.8% rate of increase in March. The figures were better than had been expected. Economists say the underlying housing market is a lot stronger than the official data would suggest as the CSO figures are based on mortgage draw-downs and do not give a true sense of what is going on in the property market because they exclude cash transactions. According to some estate agents, cash buyers account for as much as half of activity at the moment. The CSO said that property prices in Dublin rose by 3.1% last month after cooling over the previous four months. They were 17.7% higher than a year ago - the fastest rate of growth on a year-on-year basis since October 2006. Dublin house prices rose by 3.1% in the month and were 17.8% higher compared to the same time last year. Dublin apartment prices were 17.5% higher compared to April 2013, the CSO added. However, property prices in areas outside of Dublin fell by 0.3% in April compared with an increase of 1.2% in April of last year as the Dublin housing market continues to outstrip the rest of the country.
  9. The bank did not participate in this programme. If companies come on with sob stories blaming someone else I would like the whole story, both the background and the bank's version, however much as I would rate the work of a BBC researcher with a narrative to push. So the bank is accused of picking off some low hanging fruit. That's their perogative. Did they break the law? Has this been proven? Are they being taken to court? Do you know the full story? How do you know they could have survived - they thought they could, the bank thought they couldn't - or didn't care. Cest la vie.
  10. BVI - uninformed is 100% correct - just thinking aloud. If it was me, it is like something I would do. Ie why by others' houses when you can buy your own at cost and create 'demand' (unless yours are carp?). No doubt the business (and others - not just this example) would have had finance advisors and legal advisors as well as years of 'hard earned' experience. We may never know what happened and, in any event, the programme was about the other party in this equation - the bank. Would love a programme from the bank's point of view for balance but customer confidentiality and market confidence would probably militate against this. In addition, they are probably happy to keep their heads down given their role. Many parties got too big for their boots but only one group were "too big to fail". Hardly fair?
  11. He wouldn't have bought his own houses - as buyers dried up and prices plummeted - in an attempt to retain 'momentum' in an overpriced development. Nah, I'm sure he bought somone elses houses as investments for his 'kids'. I'm far too cynical.
  12. Muppets. Coalition's mortgage plan is bad case of deja vuhttp://www.independent.ie/opinion/columnists/shane-ross/coalitions-mortgage-plan-is-bad-case-of-deja-vu-30282104.html Enda and Eamon wanted the banks to lend more to first-time buyers. The once bitten bankers are reluctant to lend above 80 to 85 per cent of a house's value. Many punters can only pony up a 10 per cent deposit. So Enda and Eamon will bridge the gap. The banks will forward the missing 10 per cent or so, provided the two guardians of the taxpayers' savings put the nation's non-existent reserves on the line.Here we go again. But this time it is different. Last time, the bankers were bonkers, reckless and the ones guilty of causing long-term misery for short-term gain. This time they are more cautious than the Coalition! The mind boggles. Enda, Eamon and Michael Noonan are daring to enter borrowing territory where the bankers fear to tread.It is the Government's bright idea that it should guarantee up to 10 per cent of the value of a new house in loans to home buyers, if bankers have refused to provide above 80 to 85 per cent. Quite a novel piece of economic insanity. So 95 per cent loans are back. Purchasers of new houses, desperately seeking homes and mortgages are unlikely to turn down such an opportunity. Understandably, starry-eyed youth never does. Imagine the innocent borrowers' surprise when, having been refused the extra credit by their banker, they get a letter from the bank manager saying that they have been reprieved. Although the banker does not think the offer is prudent, the lucky borrower has been spotted by a less fussy party – the Government. Michael Noonan is riding to the rescue. He will go bail for the extra 10 per cent. Happy days are here again. The taxpayers' money is on the line. Michael calls the operation 'insurance', but it is a guarantee to the bank that if the borrower defaults, the battered Irish people will pick up the tab. Former Taoiseach Brian Cowen, regulator Paddy Neary and their colleagues – the clowns who ran around Merrion Street like headless chickens on September 29, 2008 – are laughing. Enda and Eamon have decided to follow their example. Government guarantees of bankers' property market risks are the business. Such attitudes send out echoes of all those unsolicited letters that used to arrive from the banks offering us another unsecured 10 grand to be used for any purpose known to man. Today the Government is filling the role of the reckless. Yet the genie was out of the bottle. Election considerations had forced the three top ministers to produce this 'insurance' scheme out of the hat before D-Day on May 23. Otherwise, they could face a humiliation at the polls that would make Fianna Fail blush. They still could. Irish people are no longer fooled by governments bearing gifts.They can see that this manoeuvre is a political move hugely influenced by a strong developers' lobby. The Construction Industry Federation has scored another triumph. The bankers are ****-a-hoop. Not only is the Government subsidising the mortgage market but bank balance sheets will suddenly improve if house prices rocket following this artificial boost to property values. If the effect of such measures are felt before the bank stress tests in the autumn, our banks could clear the hurdle with flying colours. The entire rationale is supposedly the need to re-employ thousands of unemployed construction workers. God bless the aspirations. There may be temporary, but precarious, jobs created. But the more serious downside will be that first-time buyers, armed with government subsidies of 10 per cent of the house value, will outbid each other for new houses. An artificially buoyant market will be created. The taxpayer will be the benefactor. If houses crash-land again, the bank guarantee on the extra house loans could be called in. The taxpayer will be the victim of the collapse. Bankers, developers and government will escape scot free. Familiar?
  13. I saw it. Not convinced it was all the fault of the banks shafting 'naive' developers. Little sympathy, as a taxpayer, obviously. http://www.bbc.co.uk/news/uk-northern-ireland-27412040 But the party was over. Property values began to slide. And the small print attached to loans became a big deal. I'll bet it did. "I had invested in five houses for my kids, but the bank got them all."
  14. http://www.belfasttelegraph.co.uk/news/local-national/uk/bank-can-act-on-housing-market-30262376.html "George Osborne said it is not his job to intervene in the housing market" W. T. F.???????
  15. Killer Bunny confirms He and jonathan Davies one and the same?????? post 4353
  16. Builders' concern as recovery in sector slackenshttp://www.belfasttelegraph.co.uk/business/news/builders-concern-as-recovery-in-sector-slackens-30229056.html The pace of recovery for builders in Northern Ireland is slowing, spelling a bumpy road ahead for the construction sector, according to a body which represents the trade.Louise Ward, services and public affairs executive of the Federation of Master Builders in Northern Ireland, said: "The results of our latest trade survey indicate that the worst may finally be over, but the building trade in the province still has a long way to go. "We must not be complacent as consumer confidence is fragile and policymakers must do all they can to help stimulate growth in Northern Ireland." She added: "It is more important now than ever for the UK government to reduce Vat on housing renovation and repair to 5%. "Independent research from Experian shows that this cut could result in 558 extra jobs in the Northern Irish economy and a stimulus effect of £13m in 2015 alone." John Armstrong, managing director, Construction Employers Federation (CEF), said capital funding was needed to boost the construction sector. "We call on the Northern Ireland Executive to set out clearly how it will spend the £1.6bn of capital funding this year and to adopt the Belfast Metropolitan Area Plan (BMAP) without any further delay. "We also appeal to the relevant ministers to unlock outdated planning agreements that are preventing private house building." The Northern Ireland Construction Bulletin, published earlier this month, revealed that construction output in the final quarter of 2013 decreased by 3.7% compared to the third quarter of 2013. This figure was 7.6% lower than the same quarter in 2012 and represented the lowest level of quarterly output seen this century.
  17. NI economy still lagging in growth compared to other UK regionshttp://www.bbc.co.uk/news/uk-northern-ireland-27207229 The Northern Ireland economy, while "well into recovery", is still lagging in growth compared to other UK regions, according to a new report. PricewaterhouseCoopers (PwC) stated the construction and retail sectors "remain depressed". Its report also said there was "a hint of a two-stage recovery", where the unskilled and low-paid may still be feeling the recession. PwC expects the NI economy to grow by two percent this year and next. Chief economist Esmond Birnie said: "Consumer confidence is at a five-year high and there is a general sense of optimism in the local economy." PwC's latest economic outlook also warned Northern Ireland remains overly reliant on the public sector, where further cutbacks are likely. "While job creation during 2013 was very encouraging, considerable employment growth came from the public sector, where austerity will become tighter," Mr Birnie said. "That suggests further public sector recruitment and investment may be constrained, placing the onus for growth on the private sector."
  18. NI house sales boomed at end of 2013 says surveyhttp://www.bbc.co.uk/news/uk-northern-ireland-27218454 Northern Ireland ended 2013 with a boom in house sales not seen for six years. Official data reveals there were almost 5,000 residential property sales in the last three months of last year. Prices rose by an average four per cent in 2013, but growth slowed down towards the end of the year. The average price, covering all types of properties, is £99,000 - still half what it was at the height of the market in 2007.
  19. House prices strong in areas of falling unemploymenthttp://www.independent.co.uk/incoming/house-prices-strong-in-areas-of-falling-unemployment-9295028.html Homeowners in areas with the largest falls in the unemployment rate have seen the value of their property jump by nearly £136,000 over the last 10 years, says a new report. According to new research by Lloyds Bank, the average house price in the 10 areas that recorded the largest falls in the unemployment rate in the last decade rose by 68 per cent. The unemployment rate in these areas fell by 1.3 per cent during the same period. The top 10 areas with the lowest house price performance and a higher unemployment rate are generally concentrated in Northern Ireland and outside southern England. These areas include Lisburn in Northern Ireland where the average house price has grown by 5% to £121,310 in the past decade. Lisburn is followed by Craigavon in County Armagh (9%), Belfast (14%), Newport in south east Wales (15%) and Blackpool (19%).
  20. New mortgage rules could derail house price recovery Tough new mortgage rules are expected to cut the number of buyers enough to cause the market to stall over the summer, experts have warnedhttp://www.telegraph.co.uk/finance/personalfinance/houseprices/10788296/New-mortgage-rules-could-derail-house-price-recovery.html And it’s not just new borrowers who will face the tough new tests. Existing customers who want to remortgage or move their loan to a new property are likely to be caught out and could find they no longer qualify. Many new buyers and even existing borrowers looking to remortgage are expected to be turned down. Many mortgages were sold with assurances that they could be moved – or ported – to a new property midway through the loan. The MMR rules say that existing borrowers will only need to be put through the new affordability requirements if they want to borrow more money, change the length of their loan, remove someone from a mortgage or move it to a new lender. Some lenders however are going above and beyond the minimum requirements and applying the tests to people who simply want to move house. Problems are likely to arise because many existing borrowers would not qualify for their mortgage if they were reassessed under the tough new affordability tests, even if their income had improved or they were moving to a cheaper property. Mr Winter warned these borrowers could be the next group of “mortgage prisoners”. Many are likely to be told they cannot afford their lender’s most competitively priced loans, and forced onto the expensive standard variable rate. Mr Winter said: “Telling these borrowers that they can’t afford a cheap deal and putting them onto an expensive SVR doesn’t seem sensible but it is one of the dangers of the MMR.”
  21. What a spectacles case can tell us about property prices and climate change - UK, deflation etcTake away the rose-tinted glasses and see the damage being done to our planet and the economy by ultra-low prices http://www.theguardian.com/money/blog/2014/apr/26/spectacles-case-property-prices-environment Amid the celebratory stories over the past week that wage rises in the UK have, finally, outstripped inflation, there are warnings of a sting in the tail. In much of Europe, deflation has taken hold and it's not just the countries of the euro, as Sweden has now followed the others into outright falls. Price cuts sound appealing, but experts warn that deflation sends countries into an economic cul-de-sac (just look at Japan). Consumers expect prices to continue falling, so they postpone purchases, while companies cut back on investment and hiring, and the country is thrown into a downward spiral of collapsing demand. For those with excessive debts (think Italy on a government level and Britain on a personal level) the real debt burden increases over time, rather than falling as it does with inflation. Ultra-low inflation or outright deflation binds the hands of central bank governors. How can Mark Carney at the Bank of England possibly raise interest rates if prices are falling? In Sweden, the Riksbank has experimented with negative interest rates, which (if you can get your head around this) means you pay to deposit money in the bank. Meanwhile, starved of a decent interest rate on deposit, funds flow into that old favourite: housing. Stockholm is in the midst of its own property bubble, much like London's. The only levers now left to Carney to take the wind out of Britain's grotesque house price spiral are so-called "macro prudential tools" – effectively ordering the banks to impose sterner tests on borrowers and ration the amount of lending. Those edged out of home ownership won't thank Carney for forcing them into the hands of a buy-to-let landlord (who, weirdly, doesn't have to meet the new regulatory rules on affordability). For depositors hoping for the day interest rates return to "normal", the likelihood seems to recede further every month.
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