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Irish Lender Drops 100 Pct Mortgages As Mkt Slows

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http://www.reuters.com/article/rbssFinanci...341299920080313

DUBLIN, March 13 (Reuters) - Irish Life & Permanent's (IPM.I: Quote, Profile, Research) bank permanent tsb will no longer offer 100 percent mortgages to home buyers due to a slowdown in Ireland's housing market, a permanent tsb spokesman said on Thursday.

An end to Ireland's decade-old property boom, when prices quadrupled, has put the brakes on years of rapid economic and jobs growth.

Some companies involved in supplying materials to the construction industry warned this month about an impact on earnings this year due to softer growth prospects for the sector.

A permanent tsb spokesman said it will cut the maximum amount it will offer for residential mortgages to 92 percent from 100 percent from the end of March.

It began to offer the service over two years ago, spurred by a booming market and competition from rivals.

"We think this is a prudent approach to the current market circumstances," he said. "The era of significant (house) price increases has come to an end."

The spokesman said permanent tsb would also cut the maximum loan it will offer to investors looking to buy homes to rent, to 80 percent from 90 percent. "It is reflecting a changing mortgage market place in Ireland," he said.

House prices in Ireland are set to fall 7.0 percent in 2008 and are only expected to grow by 0.5 percent next year, according to the latest Reuters poll of economists.

Last month Irish Life (IPM.L: Quote, Profile, Research) predicted loan growth at permanent tsb would slow to mid to high single digits in 2008.

(Reporting by Jonathan Saul)

Seems a bit late to withdraw 100% in Ireland considering they are further along in the housing slowdown.

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There has been a big effort to keep the boom going with stamp duty changes, creative accounting etc. The banks are about to get out of bed with the builders. Late Spring should bring about crash acceleration.

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http://www.reuters.com/article/rbssFinanci...341299920080313

Seems a bit late to withdraw 100% in Ireland considering they are further along in the housing slowdown.

Maybe they read this? Charles Ponzi would be proud......

"We are going to see banks on life-support with very big bail-outs. The precedent for this is what happened in the Nordic countries in the early 1990s when they had to take over the banks. We may have to do something similar," he said.

Two of Sweden's largest banks were nationalised before being nursed back to health and refloated. The Nordic rescue is seen as a model of how to tackle a banking crisis. However, Sweden succeeded only after it left the ERM's fixed exchange system and regained control of its monetary instruments.

"Look at all the signs: every single one is screaming that the economy is in big, big trouble. Housing market dead, new car sales dead, consumer confidence is dead, record job losses, exporters being killed off by a strong euro, fuel prices spike, housing repossessions increase," it said.

Irish banks may need life-support as property prices crash

Edited by scott666

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Without 100% mortgages how can FTBs and BTLers get a foot on the ladder? Surely the market will collapse unless banks can lend whatever it is the sellers are selling for? Won't it? OO-err. :unsure:

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House prices in Ireland are set to fall 7.0 percent in 2008 and are only expected to grow by 0.5 percent next year, according to the latest Reuters poll of economists.

Pure delusion. I guarantee you that if they fall 7% this year, they will not grow at all next year.

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Guest An Bearin Bui
Pure delusion. I guarantee you that if they fall 7% this year, they will not grow at all next year.

House prices in Ireland have already fallen 7% - that's the figure for 2007 and it's a conservative one too as many areas and new-builds especially saw 10-20% drops. The projected 0.5% growth for 2008 is indeed pure delusion. I read the Property Pin now and again however and there is some anecdotal evidence of a bear trap scenario developing at the moment as some over-eager bears think a 20% reduction is enough to justify buying in. Once that's over, then the drops will really start to accelerate.

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  • 293 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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