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  1. College Court Central: Buyers lose High Court test case against developerhttp://www.bbc.co.uk/news/uk-northern-ireland-32723617 Six apartment buyers who failed to complete the purchase of city centre flats in Belfast have lost a High Court test case against the developer. Their lawyers argued contracts were breached when part of College Court Central was sold for social housing. More than 70 of the 117 flats have been sold or earmarked for social housing. The judge ruled the developer was entitled to sell to social housing associations and to be compensated over the buyers' failure to complete sales. Market crashedThe apartments in King Street were built during the height of Northern Ireland's housing boom and were originally priced at up to £190,000. Potential buyers paid deposits to secure the new homes, but when the property market crashed, some were unable to secure mortgages to complete the deals. The developer, Fernhill Properties (NI) Ltd, sued some purchasers over their failure to honour their contracts. In the test case, proceedings were issued against Henry and Ann McCambridge, one of a group of six defendant purchasers. At the centre of the action was the presence of social housing tenants within the building. The total award of damages will be assessed at a later stage.
  2. Ulster Bank: NI economic recovery 'stalled since November'http://www.bbc.co.uk/news/uk-northern-ireland-32658945 http://www.belfasttelegraph.co.uk/business/news/construction-and-retail-woes-as-shops-report-sharp-sales-decline-31207601.html Construction and retail were among the poorest performers, with shop-owners reporting their worst sales decline since 2012, and construction its lowest activity in two years.
  3. Mortgage trap set for 40% of homeownershttp://www.bbc.co.uk/news/business-32452598
  4. Property: 60,000 Northern Ireland homeowners trapped in negative equityNegative Equity NI - http://www.negativeequityni.com http://www.belfasttelegraph.co.uk/news/northern-ireland/property-60000-northern-ireland-homeowners-trapped-in-negative-equity-31167197.html Negative equity affects around 40% of homeowners here, with areas including Omagh and Dungannon hit hardest. Negative Equity NI estimated it would take homeowners around 15 years to recoup the losses on their properties. According to Royal Institution of Chartered Surveyors data, house prices are set to increase by just 4% this year. In the latest figures from the Office for National Statistics, Northern Ireland saw an increase of 7.2% - the biggest annual rise in more than seven years. But the average house price was £152,000 - 43% below their peak in 2007. Phil Davison, from Negative Equity NI, said: "From our research, we estimate the average level of negative equity per residential property in Northern Ireland stands at just under £70,000, and across the country, around 60,000 people are in negative equity. "Not all of them will have an issue - they may be able to afford to sit tight and weather the storm. Others need to move because their family has grown or they've got a new job, and they face being followed around with a hefty shortfall on their mortgage. "To put that in context, if you owe £200,000 on a property that's now only worth £100,000, a straight sale would still leave you owing £100,000. Plus, time is money. In this case, the average mortgage term is 25 years. That's a long time to keep paying for something you no longer own." Mr Davison added there was a particular problem with interest-only mortgages. He said: "If you're on an interest-only mortgage, have no repayment plan in place and do nothing you are paying the interest on £200,000 over 25 years and still owe £200,000, putting the ultimate cost of the property at £400,000, regardless of its worth. "Interest-only mortgages are something we are seeing more of, and they will be the bigger story over the next few years."
  5. Coalition warns banks: reduce variable rates or face levy hikes Government threatens to remove banks' power to veto debt deals with homeowners facing evictionhttp://www.independent.ie/business/personal-finance/property-mortgages/coalition-warns-banks-reduce-variable-rates-or-face-levy-hikes-31153713.html Mr Kenny last week came under renewed pressure in the Dail when he was accused of "abandoning" the 300,000 families on variable mortgages, who are forced to pay an average of €6,000 a year more that those on tracker mortgages of around €200,000. Mr Kenny said he did not have the power to "fix rates", but warned the Government is "not happy with the banks" who are charging far more to customers than they were paying to borrow the money. While moves to hit banks would be popular politically, it could also frighten investors at a time when Permanent TSB, the country's' largest mortgage provider, is trying to raise €400m from the stock exchange. Potential investors in the much larger State-owned AIB are also likely to be concerned at such a move. However, senior Government sources told the Sunday Independent that the only way to put pressure on the banks is to "hit them in the pocket". "All the attention is on the mortgage arrears issue but there is only 30,000 of them, there are 300,000 variable mortgage holders. They are the working poor we talk about," one source said. "The only thing that moves banks is the thought of losing cash." "The banks are seriously over-playing their hand on the variable mortgages; they are starting to believe their own spin. They would want to be careful. For all of the talk of recovery AIB and PTSB still only operate at our pleasure."
  6. What Goes Boom – the Northern Ireland housing bubble in an international contexthttp://sluggerotoole.com/2015/04/18/what-goes-boom-the-northern-ireland-housing-bubble-in-an-international-context/ Yesterday’s reports that prospective purchasers were queueing to purchase properties at the new Belvoir Park development in South Belfast will have brought back memories for some of the housing boom of 2006-7, when it was a common sight to see people waiting overnight for an opportunity to purchase newly built apartments and houses. There have been other signs of a return to life in the local property market, such as a Royal Institution of Chartered Surveyors (RICS) survey that indicated that the housing market in Northern Ireland has outperformed other UK regions over the first quarter of 2005. How Santander's affordability tests are forcing rates rises - and arrearshttp://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11545203/How-Santanders-affordability-tests-are-forcing-rates-rises-and-arrears.html Many mirror the experience of Christopher Campbell, who bought a £320,000 four-bedroom detached house in Conlig, Northern Ireland, in 2008. Mr Campbell, 33, a graphic designer, took out a £155,000 mortgage with Santander, which he remortgaged in 2010, slightly increasing the loan. Repayments at their then rate of 3.29pc were £581. Six months before this deal ended, Mr Campbell contacted Santander and asked about his options for a new fix. But he was told there were no new deals available and to check back in a couple of months. He called twice more and was given the same brush off, so his loan moved onto Santander’s SVR of 4.24pc. His repayments increased to £749. Two months later, in August 2012, Mr Campbell contacted Santander for a fourth time and explained that he was having trouble meeting the higher mortgage repayments. He was refused a lower rate. “I was running my own business and the economic situation in Northern Ireland was horrendous,” he said. “Businesses across the country were hit hard by the financial crisis, mine included.” He was devastated when he received a letter from Santander the following month notifying him that it was increasing the SVR to 4.74pc, pushing his repayments up again, this time to £837. In November 2012 Mr Campbell had serious concerns about his business and asked Santander for a payment holiday or an extension to his term which was refused, despite all payments to that point being up to date. When Mr Campbell’s business folded in December 2012, he explained to Santander that he was due an inheritance that was going through probate and he needed six months. But again it refused and told him to pay what he could for three months, and after that time his loan would be referred to the “Collections” department. Mr Campbell was unable to make his mortgage payments between December and April 2013, putting him in arrears. He carried on asking for help from Santander and suggested a number of sensible repayment plans, but it ignored his suggestions. Over the next few months countless letters and emails were sent between Mr Campbell and Santander’s solicitors. Both tried to find a solution. At one point Santander’s own solicitors even suggested a payment holiday or an extension of the term – proposals which Santander rejected. All the while Mr Campbell worked hard to clear the arrears, which grew to £5,354. They were fully paid off in November 2013. He was furious about the way the bank had treated him and the fact that he still pays the high rate of 4.74pc. He complained to the Ombudsman and compiled a thorough document detailing his dealings with Santander and its solicitors. But almost 18 months on he still doesn’t have an answer. Tory long-term economic plan? Not even the propaganda is workinghttp://www.theguardian.com/business/economics-blog/2015/apr/19/tory-long-term-economic-plan-not-even-the-propaganda-is-working So it is not a miracle that the Conservatives have presided over a growing economy because that’s what economies do. They tend to grow particularly quickly during recoveries from recession, when there is plenty of spare capacity that can be used up and interest rates can be kept low without a risk of inflation. Yet despite the Bank of England keeping interest rates at 0.5% for the duration of the 2010 to 2015 parliament, the recovery has been weak, with growth averaging a bit more than 1.5% a year. Even worse, most of the growth has been the result of a rising population rather than higher productivity. Growth per head has been nugatory, which explains why real incomes have been squeezed. It may also explain why voters are resistant to one of the Conservative party’s favourite soundbites, namely that the “long-term economic plan is working”. Raising VAT and cutting back on capital spending were both serious blunders, and the result was that within two years, Osborne brought the economy to a standstill. At that point, in 2012, the original long-term economic plan was quietly abandoned and another long-term economic plan took its place. Deficit reduction would no longer be achieved in one parliament but in two. The government’s original good intentions to rebalance growth towards investment, manufacturing and exports were overtaken by the need to get growth of any sort. If that meant ramping up the property market, so be it. The process started with the Bank of England’s funding for lending scheme (FLS), under which commercial banks could get access to cheap funds provided they passed them on to small businesses and those seeking mortgages. The money went almost exclusively to the mortgage market. FLS was followed by help to buy, a Treasury plan that offered subsidised mortgages for those people trying to get on the housing ladder. All the while, the Bank of England was sending out the message that there was little or no risk of interest rates going up. Unsurprisingly, the housing market started to motor and, because demand for housing far exceeded supply, property prices started to bubble up. This was more a short-term than a long-term plan. House prices rose to levels that made them unaffordable even with official interest rates at 0.5%, and the property market lost momentum. In terms of the structure of the economy, the old imbalances remain. Manufacturing and construction output have yet to regain their pre-recession levels, while the service sector has expanded the number of low-pay, low-skill jobs. Britain now has a triple deficit problem - a budget deficit of 5% of national income, a balance of payments deficit of 5.5% of national income and a productivity deficit that means output per hour worked is 30% lower than in rival nations. Osborne rightly arrived in office warning that the UK had become far too dependent on consumer debt, but the independent Office for Budget Responsibility noted at the time of the 2015 budget: “Strong growth of residential investment and ongoing growth in house prices and property transactions leave households’ gross debt to income ratio rising back towards its pre-crisis peak” over the coming years. It said that could “pose risks to the sustainability of the recovery over the medium term.”
  7. QUB cuts jobs and student intake after DEL funding losshttp://www.bbc.co.uk/news/uk-northern-ireland-32300397 Queen's University Belfast is cutting 236 jobs and 290 student places due to a funding reduction. The move is in response to an £8m cut in the subsidy received from the Department of Employment and Learning (DEL). The cut in undergraduate places will come into effect from September 2015. McLaughlin and Harvey: NI construction firm makes pre-tax losshttp://www.bbc.co.uk/news/uk-northern-ireland-32286089 One of Northern Ireland's largest construction firms, McLaughlin and Harvey, made a pre-tax loss of £3.6m in 2014. The company said the loss was related to "contracts procured during the depths of the economic downturn." Turnover was up by 24% from £158m to £196m, with a further increase projected in 2015. The directors said they are "encouraged" by the current order book. They added that they are predicting "strong growth" in the medium term.
  8. NI housing market: ONS charts rise of 14% to Februaryhttp://www.bbc.co.uk/news/uk-northern-ireland-32300952 House prices in Northern Ireland rose by more than 14% in the year to February, according to the Office for National Statistics (ONS). That was twice the UK average rise of 7% and the biggest rise since November 2007. The ONS index suggests the price of a typical house in Northern Ireland is £152,000, comparable to the level in mid 2006. The index is based on data from mortgage completions. Northern Ireland experienced a deep and prolonged house price crash from which it is just recovering. The definitive house price index for Northern Ireland is produced by Nisra, the local government statistics agency. Its most recent edition, published in February, showed that prices rose by 8% between the end of 2013 and the end of 2014. On its measurement, prices are still lower than they were at the start of 2005.
  9. Pre-election jitters blamed for slump in new car sales in Northern Irelandhttp://www.belfasttelegraph.co.uk/business/news/preelection-jitters-blamed-for-slump-in-new-car-sales-in-northern-ireland-31127907.html New car sales in Northern Ireland slumped by 2% last month despite a continued revving up of sales elsewhere in the UK.That decrease contrasts with rises of at least 2.5% in all other three UK regions - with sales in England rising by 6.5%. March's fall will come as a disappointment after hopes that a 5% fall in Northern Ireland's car sales in January had been a mere blip - and will cast doubt on the extent of the consumer recovery in Northern Ireland. However, there had been slight growth of just 2% in February. It also confounds expectations that low inflation thanks to falling food and oil prices would result in a consumer spending boom. Economist John Simpson said the increase in car sales last year may have been due to the release of pent-up demand. "There will have been a delay factor with car sales being held up during the recession, with people deciding to hold on rather than buy new cars," he said. "There was some release of that but that doesn't mean car sales will keep going up." He added: "The economy recovery this year may be much slower than originally thought, with people taking a much more cautious attitude." Business advisers PwC have forecast growth of 1.7% this year for Northern Ireland, while Danske Bank forecasts expansion of 2.2%. Mr Simpson said the public sector redundancy scheme - which aims to slim down the workforce by 20,000 - would also have an impact on big-ticket purchases. "You may see a few thousand people taken out of the market as they adjust their personal circumstances," he said. Prospective buyers could also be holding tight due to the uncertainty around the general election. A recovery in new car sales had been judged as the first economic signal of the beginning of Northern Ireland's economic recovery.
  10. Northern Ireland household incomes 'show biggest fall in UK'http://www.bbc.co.uk/news/uk-northern-ireland-32220908 Typical household incomes in Northern Ireland were 4% - or £860 - below their pre-economic downturn level last year, according to a new study. The think-tank Resolution Foundation said that represented the sharpest fall anywhere in the UK. It said Northern Ireland has been overtaken by the North East, Wales and Yorkshire and the Humber and now has the lowest household incomes in the UK. It said official data on incomes was either flawed or out of date. The think-tank said typical household incomes in Northern Ireland were £21,794 on the eve of the economic downturn. Northern Ireland then experienced the sharpest fall in living standards of anywhere in the UK, with typical incomes falling by 6.7% (or £1,470 a year) between 2007-08 and 2011-12. Living standards have recovered steadily since then but were still £864 below their pre-downturn level in 2014, according to the study. Further increases are expected this year. It said the weak performance of Northern Ireland was due in part to it having a relatively sluggish jobs recovery compared to the rest of the UK. Its current employment rate is still 2.1% lower than in early 2008. Northern Ireland also suffered the biggest real pay squeeze of anywhere in the UK, with typical hourly wages falling by 13.4% between 2009 and 2014, compared to a UK figure of 9.3%. The Resolution Foundation has also said there was a big generational divide in experiences of the downturn. Typical incomes among pensioner households were 9.4% above their pre-downturn level last year, while working age households were still 4.6% down. Laura Gardiner, of the foundation, said: "Northern Ireland experienced the biggest fall in living standards of anywhere in the UK, with typical incomes falling by almost £1,500 between 2008 and 2012. "This is largely down to the pay squeeze workers faced. Typical incomes have recovered since then but there is a long way to go before they return to pre-downturn levels. "There are also considerable generational differences behind this headline fall in living standards, with pensioner households likely to have fared far better than those of working age. "This makes it hard to talk about living standards in a way that resonates with people's experiences across Northern Ireland."
  11. Two Belfast property firms put into administrationhttp://www.bbc.co.uk/news/uk-northern-ireland-32192287 Two related Belfast property firms have been put into administration. They are College Court Central Ltd and AD Enterprises (NI) Ltd. College Court Central developed the apartment complex of the same name in Belfast city centre. The firm has pursued a number of legal actions to get apartment buyers to complete deals agreed before the property crash. AD Enterprises owned the Lyndon Court complex on Queen Street in Belfast city centre. The company has planning permission to demolish Lyndon Court and build a seven storey office and retail development. Both companies were controlled by the Graham family who are better known as the owners of the Sean Graham bookmakers. The bookmaking business is unaffected by the administration of the property firms. It is not yet clear who appointed the administrators. The borrowings of College Court Central had previously been linked to Nama, meaning they are now likely to be controlled by Cerberus, the US investment fund.
  12. NICVA issues warning of 'hundreds' of job losses due to cutshttp://www.bbc.co.uk/news/uk-northern-ireland-32164592
  13. Cerberus' £1.3bn loan deal in Northern Ireland is a study in timehttp://www.bbc.co.uk/news/uk-northern-ireland-32170256
  14. PwC Northern Ireland economic outlook: 'Few signs' of wages recoveryhttp://www.bbc.co.uk/news/uk-northern-ireland-32156669 The firm's Northern Ireland economic outlook predicts 1.7% growth in 2015; less than other forecasters estimate. It says that job creation has almost returned to pre-recession levels. However, the report says overall economic performance continues to lag behind other UK regions. It adds that the Northern Ireland economy "remains heavily reliant on consumer expenditure". PwC's chief economist in Northern Ireland, Dr Esmond Birnie, said: "Measured by new job creation and falling unemployment alone, Northern Ireland is demonstrating strong recovery; however a number of other factors are of concern. "While the region's unemployment fell by 19.8% in 2014, that fall was only about half that of the UK average, where the jobless total declined by 32.5%. "NI's economic inactivity rate is 27.8% and remains the highest of the 12 UK regions. "In the past year the growth in the number of economically inactive was actually greater than the total decline in unemployment."
  15. Britain’s housing crisis is a human disaster. Here are 10 ways to solve ithttp://www.theguardian.com/society/2015/mar/14/britain-housing-crisis-10-ways-solve-rowan-moore-general-election Rising house prices have been willed by public policy over decades. The fallout for families, communities and business has been severe
  16. Broke solicitor Brian O'Donnell is told to quit mansionhttp://www.belfasttelegraph.co.uk/news/republic-of-ireland/broke-solicitor-brian-odonnell-is-told-to-quit-mansion-31062846.html A property speculator who built up a €1bn (£709m) international empire has been ordered to leave his former seaside mansion after losing a long-running battle against a repossession order.Ex-solicitor Brian O'Donnell and his psychiatrist wife, Mary Patricia, were told by Judge Brian McGovern in Dublin's High Court they had to be out by 5pm today as they could not have many belongings to gather up. The pair, who live in Kent, had flown in to occupy their former home in Killiney, south Dublin after their children lost a last-gasp legal attempt in recent weeks to keep it in the family. They had consented in an agreement with Bank of Ireland four years ago to vacate the property if the lender sought it as security on the pair's €71.5m (£52m) debts. The luxury house was worth in the region of £25m in the boom years but is now valued at about a fifth of that.
  17. Social Development Minister, Mervyn Storey MLA, has announced that he is increasing funding to the Mortgage Debt Advice Service (MDAS) by 50%. http://www.northernireland.gov.uk/news-dsd-100315-storey-increases-support The MDAS, provided by the Housing Rights Service, will see its funding increase to £340,000 in 2015/16, an increase of £115,000 from 2014/15. The increase in funding will enable the Housing Rights Service to provide valuable support to more people who are in mortgage crisis and further help reduce the risk of people facing homelessness and repossession. Speaking after attending a celebratory event in Parliament Buildings marking the 50th Anniversary of the Housing Rights Service, Minister Storey said: “I am delighted to be able to provide a substantial 50% increase in funding for the vital Mortgage Debt Advice Service for the forthcoming year. This will enable more people to benefit from this excellent service and further help reduce the risk of homelessness for those facing difficulties with mortgage debt.”
  18. Minister's tough decisions over private buyers facing mortgage repayment debtshttp://www.belfasttelegraph.co.uk/business/opinion/john-simpson/ministers-tough-decisions-over-private-buyers-facing-mortgage-repayment-debts-31015754.html
  19. Fears over a growing culture of dependency after DLA claimant count soars to 200,000http://www.belfasttelegraph.co.uk/news/northern-ireland/fears-over-a-growing-culture-of-dependency-after-dla-claimant-count-soars-to-200000-31028832.html
  20. Northern Ireland schools could see 1,500 jobs gohttp://www.bbc.co.uk/news/uk-northern-ireland-31725888 Translink 'could go out of business'http://www.bbc.co.uk/news/uk-northern-ireland-31725891 Police Service of Northern Ireland 'will have 200 fewer officers'http://www.bbc.co.uk/news/uk-northern-ireland-31752667 Talks over 200 Belfast call centre jobs http://www.bbc.co.uk/news/uk-northern-ireland-31732076
  21. Economically inactive refers to working age people who are classed as neither in work nor seeking work. That includes the long-term sick, students and those caring for relatives. The official figures estimate that the number of economically inactive people of working age in the period October - December 2014 was 577,000. This figure is up 11,000 over the quarter and up 14,000 over the year. The Northern Ireland economic inactivity rate for those aged 16-64 is 28%. This is significantly higher than the UK average rate (22.3%) and is the highest of the 12 UK regions.
  22. Cerberus: US investment fund in move against developer John Miskellyhttp://www.bbc.co.uk/news/uk-northern-ireland-31506774 The US investment fund Cerberus has made a major move against the developer John Miskelly, appointing receivers to several of his Belfast properties. It took control of loans made to some of his firms when it bought Northern Ireland's Nama loan portfolio. The properties in receivership include office blocks and development sites. In January, Cerberus appointed administrators to Ten Square hotel in Belfast, that was also controlled by Mr Miskelly. The hotel is continuing to trade while the business is reviewed. The properties in receivership were all held by a firm called Applecroft Investments. They are: Norwich Union House office block on Fountain Street in Belfast Londonderry House office block on Chichester Street in Belfast A development site on Queen Street in Belfast which has planning permission for a budget hotel A property at East Bridge Street in Belfast, understood to be a development site A property at Coolmillish Road in Markethill, County Armagh St Patrick's Park in Newcastle, County Down The most recent accounts for Applecroft Investments showed it owes its creditors more than £80m, while its assets are valued at just £36m. Cerberus has previously said it has "a long and demonstrated history of treating our borrowers consistently and fairly". It added that: "Not every borrower will like the outcome. "That's to be expected given these are loans in default. But we will be consistent in our approach, focused on a constructive resolution and always respectful of the market."
  23. House price inflation still strong, says ONShttp://www.bbc.co.uk/news/business-31501707 Prices rose fastest in England at 10.2%, and by 5.5% in Scotland, 4.9% in Northern Ireland
  24. Appears to be 8% YOY From the report: Residential property prices are now 1% lower than Q1 2005 (when RVs were set) Fig 1.3 shows earnings/price ratio ticking up from 4.2 to 4.5 22% rise in sales
  25. Bombardier: Aerospace firm cutting 130 jobs in Belfasthttp://www.bbc.co.uk/news/uk-northern-ireland-31506781 Tuesday's announcement brings the number of job losses to more than 500 in six months.
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