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Media articles NORTHERN IRELAND Hpc Related

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So no one in NI thinks their house or BTL portfolio is their pension?

Where do you start on Govt intervention - from interest rates to encouraging banks to lend, encouraging forbearance and pleading for no nama firesale, increasing co ownership by 50%, dithering over welfare cuts, no water charges, rates stop at £400k

not sure what help to buy has or hasn't got to do with it., the article suggests it will help values and as you correctly state it won't be coming here

I think most would agree that our local Government's view on deferring Water Charges and Welfare reform has more to do with their own votes than house prices or any assistance to the construction industry. I believe the Construction Employers Federation was pressing the gov to proceed with Water charges to allow the funding of infrastructure upgrades. I dont think the industry has a view on Welfare reform. It is, I understand coming in anyway.

I can understand the Government, who literally cashed in the crown jewels to bail out the banks, may be disappointed that the same banks are refusing to lend. I understand that the lobbying, on behalf of the government was on behalf of SME's rather than developers or mortgages. The BoE interest rate at 0.5% has had little impact on the banks as they cannot borrow at that rate.

Forbearance is an interesting subject and one we have not really debated. As someone who has paid off mortgages over the years I have a particular view on this. However, forbearance has existed for as long as credit has. The Government is encouraging the banks to deal with their bad debt. That will be a mixture of repossession and forbearance. I am not aware of the government giving specific guidance on either, they just want them to get on with it.

Rates stop at £400k (I though it was less myself). It will not affect too many then.

Rates is a payment for services by the local and regional gov to your house. This includes street lighting footpaths, bin collection etc. I house at £93k gets the same service at a house at £700k. However houses pay on value upto £400k. The person in the £400k house may be a teacher with less income than a person in a £150k house but so be it. I cant see how limiting the rates at £400k in any way boasts or props up house prices. If there was no limit at £400k then one could argue that the rates bill for houses under £400k could be less. Therefore, whilst ridiculous, their disposable income might be more and therefore able to spend more on property.

I am not aware of NAMA owning any houses that it could sell into the market by 'fire sale' (which is very emotive) or otherwise. They did take over a few mansions of Thompson in Dromore (not sure what they did with them. They also had a castle in Co.Down, which they have placed on the market.

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I think most would agree that our local Government's view on deferring Water Charges and Welfare reform has more to do with their own votes than house prices or any assistance to the construction industry. I believe the Construction Employers Federation was pressing the gov to proceed with Water charges to allow the funding of infrastructure upgrades. I dont think the industry has a view on Welfare reform. It is, I understand coming in anyway.

Rates stop at £400k (I though it was less myself). It will not affect too many then.

Rates is a payment for services by the local and regional gov to your house. This includes street lighting footpaths, bin collection etc. I house at £93k gets the same service at a house at £700k. However houses pay on value upto £400k. The person in the £400k house may be a teacher with less income than a person in a £150k house but so be it. I cant see how limiting the rates at £400k in any way boasts or props up house prices. If there was no limit at £400k then one could argue that the rates bill for houses under £400k could be less. Therefore, whilst ridiculous, their disposable income might be more and therefore able to spend more on property.

I am not aware of NAMA owning any houses that it could sell into the market by 'fire sale' (which is very emotive) or otherwise. They did take over a few mansions of Thompson in Dromore (not sure what they did with them. They also had a castle in Co.Down, which they have placed on the market.

You're right - not too many above £400k - equity is the issue not utility. Discussing the utility different households get from rates is a can of worms. It's why metering gets discussed when water charges are raised.

Twas Sammy that pleaded with NAMA for no fire sale - emotive or otherwise

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Capping the rates bill makes ownership of an expensive house relatively cheaper and is therefore a subsidy on ownership of dearer houses.

Level of service is irrelevant. Higher rate taxpayers derive no benefit from paying more income tax.

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Capping the rates bill makes ownership of an expensive house relatively cheaper and is therefore a subsidy on ownership of dearer houses.

Level of service is irrelevant. Higher rate taxpayers derive no benefit from paying more income tax.

The Rates collection collects the same amount. Therefore the amount of rates collected on houses under £400 are more expensive making ownership of houses under £400k, if we were to take it to this ridiculous level, more expensive.

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Social homes project underpinned by £10m loan from Ulster Bank

http://www.belfasttelegraph.co.uk/business/business-news/social-homes-project-underpinned-by-10m-loan-from-ulster-bank-29482208.html

THE creation of 1000 new social and affordable homes across Northern Ireland is being supported by a £10m loan from the Ulster Bank.

The houses are being built by Apex Housing Association over the next year.

Ulster Bank is supporting the project – which is hoped will bolster hundreds of construction jobs – through the the Bank of England's Funding for Lending Scheme.

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Social homes project underpinned by £10m loan from Ulster Bank

http://www.belfasttelegraph.co.uk/business/business-news/social-homes-project-underpinned-by-10m-loan-from-ulster-bank-29482208.html

THE creation of 1000 new social and affordable homes across Northern Ireland is being supported by a £10m loan from the Ulster Bank.

The houses are being built by Apex Housing Association over the next year.

Ulster Bank is supporting the project – which is hoped will bolster hundreds of construction jobs – through the the Bank of England's Funding for Lending Scheme.

They really love leverage don't they?

But on the positive side, that 10 million will be magically converted to 80 million. A vested interest construction group told us so.

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They really love leverage don't they?

But on the positive side, that 10 million will be magically converted to 80 million. A vested interest construction group told us so.

Who told you the multiplier effect in the construction industry was 8x. its nowhere near that.

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Who told you the multiplier effect in the construction industry was 8x. its nowhere near that.

I made it up.

Just like LEK Consulting (who came up with the original number) made it up.

You do know the number came from a consulting group?

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I made it up.

Just like LEK Consulting (who came up with the original number) made it up.

You do know the number came from a consulting group?

You think they made it up? An international strategy consultancy just makes things up.

Do you think their figure of £2.85 is too high?

Have you anything to back this up or are you just making this all up too.

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You think they made it up? An international strategy consultancy just makes things up.

Do you think their figure of £2.85 is too high?

Have you anything to back this up or are you just making this all up too.

My God. A consultancy company making things up their clients want to here. I would never suggest something so outlandish would happen in our society.

Of course they could never make up indirect benefits or the much more transparent and easily obtained induced benefits. I mean everyone knows these figures can't possibly be fabricated to suit a particular vested interest slant.

I'm sorry I even implied anything to the contrary.

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The Rates collection collects the same amount. Therefore the amount of rates collected on houses under £400 are more expensive making ownership of houses under £400k, if we were to take it to this ridiculous level, more expensive.

What ridiculous level?

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Homebuyers given a green light – but who will save the savers? UK

Bank of England decision to tie interest rates to unemployment will continue to punish savers and retirees

http://www.theguardian.com/money/blog/2013/aug/09/homebuyers-green-light-savers

The message is clear: savers can go hang. New Bank of England governor Mark Carney is going to make life a misery for the next three years for anyone who saves, is approaching retirement or is running a pension scheme.

The governor's promise not to raise interest rates until unemployment drops below 7%, although much caveated, has dramatic implications for everyone's personal finances.

The biggest winners are those who can afford to buy a house now or who already own property. Don't worry if you have a jumbo mortgage, Carney is effectively saying ultra-low interest rates are here to stay.

Every lever in the housing market is now pressed down at full throttle: Funding for Lending is pumping billions into mortgage lending; Help to Buy, part two, begins in January when the government starts underwriting billions more in loans; while any household that has been cautious with its finances for fear of a rise in the monthly cost of their mortgage is being told it is safe to spend, spend, spend.

The shop tills will ring. Car dealers will be delighted. Estate agents will cash in. Carpets shops, curtain makers, kitchen fitters and bathroom installers will be rejuvenated. The "escape velocity" Carney wants for the British economy may arrive sooner than we think (though much of it will be imported).

Does any of this sound familiar? Did we not spend much of the last decade borrowing too much and pumping up the housing market with easy money? Is Carney at risk of repeating the mistakes that caused the financial crisis in the first place?

Edited by Shotoflight

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The argument that a cap on Rates at £400k was a prop to house prices in Northern Ireland.

Well it is a subsidy on awnership of an expensive house so it can't have done any harm to the prices of high end houses. Bidders were able to ignore rates bills as a cost factor in their calculations

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Well it is a subsidy on awnership of an expensive house so it can't have done any harm to the prices of high end houses. Bidders were able to ignore rates bills as a cost factor in their calculations

The pool of rates has to be paid by house owners. Therefore this 'sunsidy' on houses over £400k is lumped onto the houses under £400k, which include the vast amount of houses in NI. Therefore it should, if you accept the argument, make the vast majority of houses more unaffordable.

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The pool of rates has to be paid by house owners. Therefore this 'sunsidy' on houses over £400k is lumped onto the houses under £400k, which include the vast amount of houses in NI. Therefore it should, if you accept the argument, make the vast majority of houses more unaffordable.

Correct. A tax on the poor.

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http://www.belfasttelegraph.co.uk/news/local-national/northern-ireland/housing-market-shows-improvement-29493097.html

spin spin spin

90% say prices stay the same

7% say prices rose

3% say prices fell

Those who bought in the last 10 years will not be able to find enough equity in their houses to move up the ladder.

Mainly FTB purchases

Why do you say spin. This report has been negative for almost the last 6 years. When it was showing negative no one here used the word 'spin' to describe it.

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http://www.belfasttelegraph.co.uk/news/local-national/northern-ireland/housing-market-shows-improvement-29493097.html

spin spin spin

90% say prices stay the same

7% say prices rose

3% say prices fell

Those who bought in the last 10 years will not be able to find enough equity in their houses to move up the ladder.

Mainly FTB purchases

A more measured report from the BBC:

http://www.bbc.co.uk/news/uk-northern-ireland-23669225

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Those who bought in the last 10 years will not be able to find enough equity in their houses to move up the ladder.

Mainly FTB purchases

I'm not sure I understand your point. Surely as you get older your financial position improves and that supports a more expensive property, not equity in your current house. Are you implying these folk will have suffered from such a dramatic decrease in the value of their house that they will still be in negative or close to break even point? In that case that's tough luck.

I think we have to accept that what we saw a few years ago was a bubble, but there will always be people looking to purchase houses and if FTB can't afford to get on the property ladder then we are all screwed. Unless you have a BTL!

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"The stabilisation in prices is encouraging greater activity, albeit we are still some way off what would be considered healthy transaction volumes. Trading up is still constrained as people who bought in the last 10 years have not been able to build inflation equity."

Trading up may be somewhat constrained by the lack of 'inflation equity' - perhaps - but the Buy to Let brigade don't trade up,and they have bought a substantial amount of what would otherwise have been starter houses - the bottom rung of the ladder (hateful metaphor - apologies) is getting smaller.

\ /

the ladder is broken... and no-one saw it coming :)

edited as my ladder looked like a two fingered salute - or perhaps that the way it should remain?

Edited by broken

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http://www.bbc.co.uk/news/uk-northern-ireland-23687628

2025 before prices get back to 2007.

Hard to disagree with anything he says on this.

Dr Birnie said that while some types of property in popular areas are demonstrating real recovery, prices have "some way to go before they are clearly on the turn"...

He said it could be 2025 before prices again reach 2007 levels.

When you think about he is saying it could be 12 years before house prices in Northern Ireland Double in value.

In other words he is saying that if you buy a house today it could take 12 years for it to double in value.

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It is also true that if you try and sell that "doubled in value" house in 12 years time and re buy in the same market then you will still over pay for the new house.

If I understand you correctly I believe I agree with what you are saying.

I don't want to see house prices go anywhere near their 2007 level unless inflation (wages) lifts substantially with it. In any event, I don't believe house prices will reach 2007 levels, in real terms in our life time.

The big question is should you be buying now?

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I have no problem with buying providing I can get a house at good value that ticks most of my boxes. I think that's all any of us are looking for.

However I will not fund someone else's retirement by overpaying for a house.

I would also say that affordability is key - risk assess if you can afford to pay at 8% interest. It may come one day.

I have no doubt 8% interest or higher will come, usually to control inflation. There are 10 year fixs at under 5%. I wish we could get a 20year fix like you can in the US.

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Hard to disagree with anything he says on this.

When you think about he is saying it could be 12 years before house prices in Northern Ireland Double in value.

In other words he is saying that if you buy a house today it could take 12 years for it to double in value.

Attached is a chart I drew for my amusement using the Nationwide data and the Bank of England inflation calculator to work out the "real" prices of NI houses - for all, detatched, and the UK for comparison. (I'm sure I saw something similar on here before but I couldn't find it.) The blue line is the real NI average price before 2000 - about £73k.

I would be amazed if prices were to double again from here, either in nominal or real terms, in just 12 years when there is little evidence that they have even bottomed yet. What would be the driver except for another credit boom?

The speculation that prices will ever return to 2007 levels would have to be based on the assumption that prices then were good value and they will correct back. More likely their true value is really being approached now. The myth seems to remain out there that what happened to NI house prices in the last 10 years was normal and the deflated prices we are seeing now is abnormal rather than the other way around.

Real House Prices NI.pdf

Real House Prices NI.pdf

Edited by nemesis

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