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Northern Ireland "a Bankruptcy Hotspot"


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http://www.4ni.co.uk/industrynews.asp?id=36539

Given the 6%+ rise in house prices in Northern Ireland reported by the Halifax for the month of December, possibly it's paying too much for their houses which is sending them all bankrupt?

If you look at historical prices, you'll notice that Northern Ireland missed out completely on the late eighties boom and bust. Most people in Northern Ireland have no personal experience of a house price crash, and simply don't believe that house prices can go down. They're in for a nasty shock.

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Many of the buyers in the Northern Ireland market at present are from the South.

I suspected that this was what was happening. Just as crappy areas next to desirable areas in cities experience an "overspill" effect as more and more people become priced out of the more desirable areas, so Northern Ireland has been infected by the house price boom which is centred on Dublin.

The parallels to the English situation are:

London=Dublin

North of England=Northern Ireland.

The house price boom begins in the capital, and spreads out across the country, like a ripple on a pond.

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Ireland has its own unique circumstances as there is LOTS of funny money - from drugs, protection rackets etc. - going into the property market, north and south of the border.

It remains a classic way of laundering hot cash.

The thing is, I'm not sure how unstable this situation is. One could argue that dodgy dealing is as old as the hills and will last a lot longer than other market's simple buyer sentiment.

However, I would be VERY VERY careful of investing there. With the peace process on a knife-edge, it would be very easy to buy into a place and later find it virtually uninhabitable.

That said, a lot of the bankruptcy stats will be the result of the quite unbelievable culture of keeping up with the Fitzpatricks.

Almost everyone seems to be putting on conspicuous displays of "wealth", and if you aren't driving a German marque across there you are in the minority.

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Ireland has its own unique circumstances as there is LOTS of funny money - from drugs, protection rackets etc. - going into the property market, north and south of the border.

I doubt Ireland is the only country in the world with "funny/blackmarket money", drugs and protection rackets are global. And no, I do not think the new money-laundering regulations in the UK will deter the hardcore money-launderers (never mind the Russian billionaires, Arab oil sheikhs, etc).

I think a rather more obvious explanantion for Ireland's house price boom is its 2% interest rate.

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I doubt Ireland is the only country in the world with "funny/blackmarket money", drugs and protection rackets are global.

Hence my emphasis of "LOTS". Don't insult me by sugesting I am naive enough to believe Ireland is alone in being home to dodgy practices.

However, I would be interested to hear you argue that it is not more of an issue there than here.

Oh, and you might want to check Northern Ireland's interest rate again.

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Don't insult me

My, we are touchy today. It was a simple application of Ockham's Razor:

In its simplest form, Ockham's Razor states that one should not make more assumptions than needed. When multiple explanations are available for a phenomenon, the simplest version is preferred. A charred tree on the ground could be caused by a landing alien ship or a lightning strike. According to Ockham's Razor, the lightning strike is the preferred explanation as it requires the fewest assumptions.
Ockham's Razor is now usually stated as follows:

Of two equivalent theories or explanations, all other things being equal, the simpler one is to be preferred.

http://en.wikipedia.org/wiki/Occam's_Razor

Oh, and you might want to check Northern Ireland's interest rate again.

Where did I say NORTHERN Ireland's interest rates were 2%? However, it is but the matter of a moment for borrowed money from the South to make its way to the North.

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Guest Charlie The Tramp

I bet the London bankrupts owed more than their NI counterparts when they both hit the dust. :D

And this is very worrying.

http://www.telegraph.co.uk/money/main.jhtm.../12/ixcity.html

And the last crash will be a blip compared with this one. Credit control will be the next regulation passed by parliament and we will return to the old days of strict borrowing rules. No more 0% finance, self cert will be by a statutory declaration, and 10% deposits required on all credit purchases. CCCs will have to check that applicants are not in debt with other CCCs. The ruler will hit the Knuckles or the economy will go t**s up. Mervyn has already warned of the consequences to the economy with this out of control debt bubble. :(

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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