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Shotoflight

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  1. Ombudsman rules that lender West Brom can raise tracker mortgage rate without Bank Rate rise Buy-to-let mortgage customers are being told the lender had a viable commercial reason to impose shock rate risehttp://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11226776/Ombudsman-rules-that-lender-West-Brom-can-raise-tracker-mortgage-rate-without-Bank-Rate-rise.html The financial ombudsman has dealt a blow to thousands of West Bromwich buy-to-let tracker mortgage customers fighting a shock rate rise that saw their repayments spike. The ombudsman, which has been sitting on a raft of complaints for up to a year, has begun issuing decision letters saying the lender had legitimate commercial reasons to vary its tracker rate. (click here for a scanned copy of the letter) In September 2013, West Brom announced it was raising rates for 6,700 buy-to-let tracker borrowers by 2 percentage points in December. This more than doubled some customers’ rates and significantly increased their monthly repayments. The change affected "professional landlords" with three or more properties who took out at least one mortgage through West Brom's now defunct lending arm, West Bromwich Mortgage Company. Customers complained in droves about the rate rise because the Bank of England's Bank Rate has remained at 0.5pc since March 2009.
  2. PwC says NI's economic growth is set to slow down in 2015http://www.bbc.co.uk/news/uk-northern-ireland-30011733 The firm said that growth in 2014, forecast at around 2.2%, is being largely driven by consumer spending. However, it predicted consumer spending will dip, bringing growth down to 1.9% in 2015. That is below the forecast UK average of 2.5% and the lowest predicted growth for any UK region. The firm said that consumer spending growth has been relatively strong for the past two years despite weak earnings growth. That is attributed to more people being in work, increased income tax personal allowances and low mortgage interest rates. However, PwC said it expected the proportion of household spending on essentials like housing costs and utilities to rise steadily and account for more than a quarter of total consumer spending by 2020. The report also said that while Northern Ireland has "performed remarkably well" in job creation since the economic crisis, that has not translated into improved economic output. After London, Northern Ireland was the second best-performing region in terms of absolute employment growth. Between 2009-2014, the region's employment grew by 8.3%, well ahead off the south-east at 5.4% and Scotland at 4%. However, the overall performance of the economy, as measured by Gross Value Added (GVA), is weaker. GVA is a measure of income generated by businesses, minus the cost of goods and services used to create the income. London delivered a 15.4% GVA increase in cash terms between 2007-2012. Over that period Northern Ireland's GVA actually declined by 1% - the only region to show a fall. Esmond Birnie, PwC chief economist in Northern Ireland, said that pointed to structural weaknesses in the economy. "While we are creating jobs, those jobs aren't creating wealth, increasing wages, improving household disposable incomes and that makes closing the prosperity gap with the rest of the UK next to impossible," he said.
  3. UK One-third of mortgage borrowers would struggle if interest rates riseAn increase of two percentage points would create problems for 32% of borrowers in the UK; in the south-east of England the figure is 39% http://www.theguardian.com/money/2014/nov/09/one-third-would-struggle-to-pay-mortgage-on-two-point-rate-rise
  4. Revealed: Shocking level of failure in Northern Ireland's schools http://www.belfasttelegraph.co.uk/news/education/revealed-shocking-level-of-failure-in-northern-irelands-schools-30722472.html Finance minister warns of pain in coming years http://www.irishnews.com/news/finance-minister-warns-of-pain-in-coming-years-1390779 Finance minister Simon Hamilton told the assembly yesterday that cuts to all but two departments next year were likely to be followed by further reductions up until the end of the decade.
  5. The state we're in: Stark choices facing us about how we want to live in Northern Ireland - from education and health, to the economy and the pasthttp://www.belfasttelegraph.co.uk/news/politics/the-state-were-in-stark-choices-facing-us-about-how-we-want-to-live-in-northern-ireland-from-education-and-health-to-the-economy-and-the-past-30725506.html Retailers report sharp decline in trading activityhttp://www.belfasttelegraph.co.uk/business/news/retailers-report-sharp-decline-in-trading-activity-just-ahead-of-allimportant-christmas-shopping-period-30730493.html Northern Ireland economic recovery slowinghttp://www.bbc.co.uk/news/uk-northern-ireland-29978453
  6. Homeowners hit by 'sneaky' mortgage feeshttp://www.bbc.co.uk/news/business-29878570 Homeowners are having to pay 'sneaky' and 'unclear' mortgage fees, according to the consumer organisation Which? It said borrowers face more than 40 different fees and charges, making it hard to calculate actual costs over the lifetime of a mortgage. Average arrangement fees have almost doubled in five years, from £878 in 2009 to £1,588 in 2014, its research found. The government said it was committed to improving competition between lenders.
  7. New Beginning plans to buy mortgages of 15,000 distressed borrowershttp://www.rte.ie/news/business/2014/1031/656136-new-beginnings-mortgages A lobby group, which represents distressed borrowers, is working on a plan to purchase 15,000 mortgages from the banks. It is understood New Beginning's proposals focus on offering the homeowners, who currently face repossession, the option to rent their homes instead. The distressed borrowers would then have the option to repurchase their homes if their circumstances improve in the next seven years. The proposals have been backed by Fine Gael TD Regina Doherty, who has raised the matter with Minister for Finance Michael Noonan. New Beginning plans to pay for the mortgages by using a Maltese-registered company, which would pay the banks with a bond and an annual coupon or interest rate repayment. After seven years, New Beginning would plan to sell the homes to the tenants or sell the properties to an investment vehicle, which would continue to let them to the tenants. It is understood it has hired PriceWaterhouseCoopers, and stock broking company Davy have acted as advisers on the project. Any deal would require the agreement of the banks to sell the mortgages to New Beginning's company. The organisation is planning to open discussions with the banks in the coming weeks.
  8. Ulster Bank: Ellvena Graham says branch closures 'inevitable'http://www.bbc.co.uk/news/uk-northern-ireland-29850137 "We have 79 branches. Our closest competitor has 50. I do think that 79 is probably still too high," Mrs Graham said.
  9. Education: This is not just about cuts, it's about investing in our futurehttp://www.belfasttelegraph.co.uk/opinion/news-analysis/education-this-is-not-just-about-cuts-its-about-investing-in-our-future-30706136.html Faced with cuts on this scale, we need a transparent, adult debate, engaging the whole society. Hard choices are required to generate additional revenue and to mitigate cuts. Is now the time to remove the rates cap on larger properties? Why should small householders pay 100% of their rates, while those in houses valued at £800k pay less? Removing the rates cap would dampen damaging housing speculation in favour of homes for need. What about water? The trade union campaign against water charges was more sophisticated than merely "Can't Pay, Won't Pay". Welsh Water is owned by Glas Cymru, a single-purpose company with no shareholders, run solely for the benefit of customers - reducing Welsh Water's asset financing, the industry's single biggest cost. By adopting Glas Cymru's governance model, there would be no impediment to an independent assessment of systemic water costs - then charged, progressively, through the rates. The Nipsa union has undertaken such an estimate, assisted by industry experts. Queen's University's Professor Paddy Hillyard has undertaken detailed work on how best to protect the disadvantaged. advertisement Kissing goodbye to water privatisation is the stick for Executive parties, with the carrot of additional revenue raised through the rates. Another budgetary side-effect is that the proposed £400m "giveaway" of corporation tax - a measure with no social clauses attached and which will not guarantee even one job - is surely a dead letter. Neither can the "costs of division", estimated at £1.5bn, be exempt. Reducing segregation costs should be central to the budget. For instance, we have five providers of teacher training. The recent Aspiring to Excellence report of Finnish educational expert Pasi Sahlberg sets out four options to tackle undue duplication. Politicians must bite the bullet on this and other "cost of division" waste. The principle of "invest to save" should run through the budget narrative. The UK "tax gap" of tax evaded, avoided and uncollected is a staggering £120bn.
  10. Getting down to the business end of things now. The can has hit a brick Conservative wall. Will this have implications for corporation tax which would suck more hundreds of millions from the block grant? As Scottie would say "She cannae take any more, Cap'n, she's gonna blow" Northern Ireland Executive has been ignoring the financial crisis since 2007 http://sluggerotoole.com/2014/10/29/northern-ireland-executive-has-been-ignoring-the-financial-crisis-since-2007 Stormont budget cuts: How we ended up in this mess in the first place http://www.belfasttelegraph.co.uk/debateni/blogs/liam-clarke/stormont-budget-cuts-how-we-ended-up-in-this-mess-in-the-first-place-30697192.html The origins of the crisis lie in 2007, the final year before the property crash, when the Executive parties agreed a number of eye-catching giveaways. Water rates were set aside, at a current cost of £180m a year; our leaders held regional rates down, giving us the lowest household taxes in the UK, and there were also free prescriptions for everyone and free travel for the over 60s. None of these benefits are available in Britain and they aren’t covered by our block grant subsidy from Westminster. The hope was that we could sell surplus public sector land into the booming property market to fund them, but that proved impossible. The Executive made the same mistake as the banks – it gambled on property.
  11. It would be interesting to see how "affordable" they end up and whether the uni subsidises or takes any interest in them - could they not have built in their own "halls" into the plans? Anyhow I get the impression demand is always greater than supply - precicely because the unis take little or no interest in this and are so hands off. I think a large % in the holylands (majority?) are UUJ and get the impression that what few locals are left wouldn't miss them (or Queens) and the antics (albeit, perhaps a minority tarnishing the reputation of all). Not an expert, though. Perhaps the aim of getting 50% to uni may also be starting to run out of steam. University of Ulster may cut intake by 3,000: Stormont funding crisis could see campus slash student numbers http://www.belfasttelegraph.co.uk/news/local-national/northern-ireland/university-of-ulster-may-cut-intake-by-3000-stormont-funding-crisis-could-see-campus-slash-student-numbers-30676271.html
  12. Why aren't the British middle-classes staging a revolution? Why aren't the middle-classes more angry about stories such as the Phones4U collapse, and what will it take to tip us over the edge.A month old and UK rather than NI - but well worth a read in full (I thought) http://www.telegraph.co.uk/men/thinking-man/11109845/Why-arent-the-British-middle-classes-staging-a-revolution.html The point is, along with the people who sold phones who are now unemployed, some of Phones4U’s employees, were officer class, just like you. Their jobs too have gone. It’s just another example of people who build and make nothing gutting businesses, privatising the profits and socialising the losses. Slowly, it makes us all poorer. So, yes, this is a lifestyle issue inasmuch as it’s about ensuring that you and your children will be able to worry about things like Farrow & Ball Paint colours, rather than getting another credit card to pay the rent. All these guys care about is money. They don’t care about society. They certainly don’t care about jobs and they don’t care about you. OK, you might say, but this has always been going on. But it hasn’t. This sort of utterly amoral screw-everyone capitalism has become much more prevalent in the last 15 years. Our financial elite is now totally out of control. They learned nothing from the crisis, except that the rest of us were stupid enough to give them a second chance. And, now, having plucked all the “low hanging fruit,” they’re destroying the middle classes for profit. Our current problems have their roots in the early 80s. While much of what Reagan and Thatcher did was necessary, the trouble is that they set a deregulatory train in motion which, over the last couple of decades has dismantled so much of the legal framework that protected us from greedy scuzzballs. The middle classes went along with it. We were sick of the Left, tired of powerful unions and, besides, very few us could remember the inequality of the 1920s that gave rise to many of these regulations in the first place. Also, vain fools that we were, we identified upwards. We thought the elite had our interests at heart. The 0.1% must have found this pretty cute. They knew the truth. We weren’t their pals, we were just at the end of the line for the financial blood-letting. We had plenty of other distractions too. Booming house prices meant we felt rich while our incomes stagnated. Ditto easy credit and cheap consumer goods. And the super-rich are much cleverer than they once were. No longer are they Mr Burns types. Rather, they have an army of people doing PR for them in various guises. Perhaps you’re one of them. For years there have been plenty of well-paying middle class jobs, helping the rich asset strip the world while pretending this is for everyone’s benefit. The reckoning has been a long time coming too. And even now, when we can see the swarm of financial locusts on the horizon, the sun is still shining and we can still (just about) afford the nanny. But for how much longer? The locusts are already well into the middle middle classes – you know, those poor schmucks who make, say, 40K a year. They may not have reached you yet, in your tastefully decorated detached Victorian house, but they will. If there’s a buck to made jacking up your mortgage, or asset-stripping the company you work for, privatising some local service you rely on or selling a publicly-owned amenity you enjoy, they won’t think twice. In fact, they won’t even think once. If they could figure out a way to sell your body from under you, they would. Then they’d get some business school shill to write an op-ed in the Wall Street Journal about how this was inevitable – and how, really, you should be grateful.
  13. Millions face years on the breadline: Britain has more long-term low-paid workers than ever - UKhttp://www.independent.co.uk/news/uk/home-news/millions-face-years-on-the-breadline-britain-has-more-longterm-lowpaid-workers-than-ever-9818694.html More than five million workers are in low-paid work, with the proportion of people on low salaries rising from 21 to 22 per cent last year, according to the new research by the Resolution Foundation think-tank. It badly dents hopes of an economic recovery driven by consumer spending: millions are in jobs so poorly paid that they have little if anything left to spend after their basic needs have been met. The report, Low Pay Britain 2014, reveals that 5.2 million workers earn less than £7.70 an hour, an increase of 250,000 on the previous year. The minimum wage is £6.50 an hour. The “stickiness” of low-paid work, defined as being less than two-thirds of median hourly pay (equivalent to £7.69 an hour), is a serious problem, it says. Almost a quarter of minimum-wage workers have remained on that rate for the past five years. Women are still far more likely to be low paid than men. More than a quarter (27 per cent) fall into this category, compared with 17 per cent of men. Britain ranks poorly compared with other countries. Workers here are more likely to be low paid than those in broadly comparable economies such as Germany or Australia. They are twice as likely to be low paid as their counterparts in Switzerland, and four times as likely as those in Belgium. Matthew Whittaker, chief economist at the Resolution Foundation, said: “It’s troubling that the number of low-paid workers across Britain reached a record high last year. Being low paid – and getting stuck there for years on end – creates not only immediate financial pressures, but can permanently affect people’s career prospects.” The scale of the problem is a “financial headache” for the Government because it “fails to boost the tax take and raises the benefits bill for working people”, added Mr Whittaker. http://www.bbc.co.uk/news/uk-politics-29771470
  14. Ulster Bank portfolio: £5bn loans may be soldhttp://www.bbc.co.uk/news/uk-northern-ireland-29763316 Ulster Bank is proposing to sell a loan portfolio with an original value of almost £5bn. The bank is seeking to leave behind the legacy of its boomtime property lending. It had originally put together an all-island portfolio called Project Aran containing loans with an original value of just over £1bn. The property news service Co Star said the bank has decided to increase the size of the portfolio due to demand. It said the shortlist of buyers includes the funds Lone Star and Cerberus and a consortium which includes Goldman Sachs. Banks across the island of Ireland have been selling loan portfolios as a way to swiftly reduce property exposure. Ulster Bank is working to drastically reduce its property loan book over the next two years. Aside from loan sales, it has also been working with some of its borrowers to sell assets and restructure borrowings.
  15. Cambridge leads UK house price record riseValues now exceeding the 2007 peak in eight British cities sit mostly in the south-east as Belfast and Liverpool remain far below pre-crash market http://www.theguardian.com/business/2014/oct/24/cambridge-leads-uk-house-price-rise However, Hometrack’s research director Richard Donnell described Belfast as “the one city that experienced a true housing boom and bust in the last cycle”. He added: “At their peak, prices in Belfast were rising at 61% per annum in April 2007, supported by low mortgage rates and positive sentiment feeding across from the Republic, as well as on the back of the peace process. Demand fell over the financial crisis and average house prices bottomed out in July 2013.” Since then, he said, they have increased by 10%.
  16. Buy-to-let boom: one in five homes now owned by landlords - UKhttp://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11179073/Buy-to-let-boom-one-in-five-homes-now-owned-by-landlords.html Private landlords now own almost one out of five homes in Britain and they will buy a further million in the next five years, according to new research highlighting the phenomenal growth of buy-to-let. The figure, along with other startling statistics about this increasingly popular form of investment, provides the latest snapshot of Britain’s changing housing market as fewer people own and more rent. An army of two million private landlords now own and rent out five million properties, according to the report by mortgage lender Paragon. This means 18pc of households now rent from private landlords. And the proportion is growing, as investors continue to see property as a source of future income and profit. The Government's own figures suggest that by 2032, more than one in three properties will be owned by private landlords. The report "18 Years of Buy-to-Let" drew on information from a range of sources and was published to mark the eighteenth year since the “invention” of buy-to-let. That was 1996, the first year in which mortgages specially aimed at private landlords were made available. The number of properties owned via buy-to-let grew has almost doubled in the period, it said, and is now worth a total £1 trillion. Buy-to-let became hugely popular in the housing boom of 2005-2007 when property investment “clubs” proliferated and thousands of investors bought newly-built flats without even viewing them. But the widely-predicted bust never followed. The banking crisis led to a mortgage drought which prevented younger generations from buying, and instead swelled the pool of renters. At the same time plunging interest rates cut mortgage costs and helped many amateur landlords hang onto to their properties, even if they were in negative equity. The buy-to-let boom has gathered pace in the past few years with mortgage lending rising at over 20pc per year and the number of available landlord loans now topping 700.
  17. New era as Cerberus now starts its fire salehttp://www.belfasttelegraph.co.uk/business/opinion/editor-viewpoint/new-era-as-cerberus-now-starts-its-fire-sale-30685823.html Nama had been set up to cleanse the Irish banking system of toxic loans on property. Since Northern Irish people borrowed as freely from southern banks as the next man, our developers were naturally seriously affected by Nama. Many of Nama's debtors whose assets weren't sold on are part of the new Cerberus portfolio - and yesterday marked the first sales from that portfolio. The debtor was the well-known north west family, the Kennedy Group, famously a title sponsor of the North West 200. Now their portfolio of property is being dispersed with the jewel in the crown, its Ramada Hotel in Portrush, on sale through CBRE. The emergence of Cerberus has meant we have turned our sights from Nama to focus on a new player, which is unlikely to provide the same thrills, spills and headlines as the Irish state body. Ulster Bank is also continuing its equivalent of Nama, as it rids itself of its unwelcome property loans - though with the improving property market, such debt is no longer the millstone it once was. Another hotel in the north west, Kilrea's Portneal Lodge, is also likely to be part of Ulster Bank's Project Aran, which could be snapped up by Cerberus, one of three final bidders. There is plenty to keep us interested in the next few months.
  18. New NI house 'starts' lowest in decadehttp://www.bbc.co.uk/news/uk-northern-ireland-29727163 Northern Ireland had its lowest rate of new housing 'starts' in a decade in 2013, according to the latest official figures. A housing start refers to the beginning of work on a residential property, such as the laying of foundations. In 2013, there were 5,170 starts compared to 5,828 in 2012. That compares to more than 15,000 starts in 2005, which was the peak year. The number of houses completed also fell year-on-year from 8,030 to 7,902. That compares to nearly 18,000 completions in 2006, but is above the low of 6,800 in 2011.
  19. User consultation The first user consultation was held on 20 February 2013. It was focused on key users and included economic commentators, media correspondents, members of the business community and government policy users. More information can be found in the link below: http://www.dfpni.gov.uk/lps/ni_rppi_user_group_meeting_on_20_feb_2013_-_note_for_website.docx
  20. Bureaucracy 'forcing house-builders out of NI'http://www.belfasttelegraph.co.uk/business/news/bureaucracy-forcing-housebuilders-out-of-ni-30670378.html But he praised regional and central government for recognising the importance of private and public housing and giving rise to schemes to increase supply. "These included the reduction and removal of infrastructure and affordable housing obligations to unblock supply," Mr Mulligan said. "There was government funding and guarantees to both help the builder and the purchaser to finance housing." He also criticised leaders for opting out or not availing of taxpayer-funded initiatives home-buyers in England, Scotland and Wales have benefited from. Assembly must help Northern Ireland building industry, says bodyhttp://www.belfasttelegraph.co.uk/business/news/assembly-must-help-northern-ireland-building-industry-says-body-30670490.html
  21. Ballymacarrett Credit Union goes bust but savers' money is safehttp://www.bbc.co.uk/news/uk-northern-ireland-29663245 CEF says recovery in NI construction industry has not 'materialised'http://www.bbc.co.uk/news/uk-northern-ireland-29643433 Recovery in the construction industry in Northern Ireland has "simply not materialised", an industry body has warned. Latest official figures show output in the second quarter of 2014 was almost 4% down on the previous quarter and 6% lower than the same period in 2013. John Armstrong, from the Construction Employers Federation (CEF), said this represented a "new low". The industry in NI has struggled to recover from the property crash. Northern Ireland suffered a huge crash in 2007 and 2008. A construction industry boss told me recently his firm was seeing no sign of growth in Northern Ireland and these figures bear that out. Mr Armstrong added that there was now "serious concern" in the industry that government spending pressures would act as a further brake on growth. Output is now about half of its 2007 peak and as many as one in three jobs in the industry has been lost since that time. Mr Armstrong said the main bright spot was that local companies have shown "remarkable success" in winning work in Great Britain. He estimated that the top 20 local construction firms have turnover of around £1.5bn of which £1bn is now generated outside Northern Ireland. Looking at public spending he said that pressures on the resource budget have already led to "substantial job losses" in construction companies working on public sector maintenance contracts. "There is serious concern that worse is to come," he added. HMRC: More than 90 jobs to be lost in Newryhttp://www.bbc.co.uk/news/uk-northern-ireland-29650348 'Eight jobs' to be lost in restructuring at Ulster Bankhttp://www.belfasttelegraph.co.uk/news/local-national/northern-ireland/eight-jobs-to-be-lost-in-restructuring-at-ulster-bank-30670818.html
  22. NI economy grows slightly in second quarter of 2014http://www.bbc.co.uk/news/uk-northern-ireland-29625448 The growth is being driven by the services and manufacturing industries while construction output is still falling. NI economy 'slowdown around the corner', according to Ulster Bankhttp://www.bbc.co.uk/news/uk-northern-ireland-29577054
  23. NI prices http://www.cheapestoil.co.uk/Heating-Oil-NI.aspx Crude prices falling heavily http://www.bbc.co.uk/news/business/market_data/commodities/default.stm Workers continue to get poorer http://www.bbc.co.uk/news/business-29627831 Average weekly earnings in the June-to-August period, excluding bonuses, rose by 0.9% from a year earlier. Including bonuses, earnings rose by 0.7%, well below inflation, which is currently running at 1.2%. "Real pay continues to drop, carrying on the trend that began six years ago. Weak pay is bad news for household budgets, but also for the levels of income tax receipts and the UK's fiscal position," said Martin Beck, senior economic advisor to the EY ITEM Club Shadow work and pensions secretary Rachel Reeves criticised the weak growth in wages. "Wages still well behind inflation. The pay squeeze on working people continues," she tweeted.
  24. Colleges warn of massive job losses over cuts Crisis at threat to slash 15% of fundshttp://www.belfasttelegraph.co.uk/news/local-national/northern-ireland/colleges-warn-of-massive-job-losses-over-cuts-30654529.html
  25. Great public sector cull looms as the Executive plans to make 13,000 staff redundant to save £160m in salaries Cutbacks agreed with Treasury as part of bailouthttp://www.belfasttelegraph.co.uk/news/local-national/northern-ireland/great-public-sector-cull-looms-as-the-executive-plans-to-make-13000-staff-redundant-to-save-160m-in-salaries-30655097.html There are 212,000 public sector employees in Northern Ireland, about 24,000 of whom work in the Civil Service. There are another 74,000 in the health service, 65,000 in education and 10,000 in the police. More work in local government. "To achieve the savings, the scheme will have to cover the whole public sector," Mr Hamilton said. "The pressures are hitting right across the board and the Civil Service is only a little over 10% of the total.
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