Daft Property - Irish Property News

Record 70,000 now behind on mortgage payments... MORE borrowers will be pushed into arrears on their mortgage payments because of rising unemployment, a ratings agency predicted yesterday as new figures show the number in trouble surged to 68,248 in July. That figure represents an increase of 12,485 in the numbers who are behind by three months or more on their mortgage payments when compared with last April. Overall, almost 9pc of homeowners are now in arrears. Ratings agency Moody's said it expected more borrowers to be pushed into arrears as jobless numbers increase. Moody's figures tend to be more up to date that those of the Central Bank which last month said arrears had risen to 7.2pc in June, leaving 55,763 homeowners three months or more in arrears. The Moody's figures imply that 22,231 have not paid their mortgage for a year or more, calculations based on their statistics show. These homeowners are at serious risk of losing their homes, home-loan experts ...

IT could be years before the mortgage market recovers, economists said yesterday. They were reacting to new figures that showed just a trickle of new home loans were issued between April and June. Mortgage lending has seized up, with just 3,550 new mortgages granted in April, May and June. This is half the number issued in the same quarter a year ago, and a fraction of the 41,000 issued in the same three-month period in 2007, figures from the Irish Banking Federation show. Housing economist David Duffy, of the Economic and Social Research Institute (ESRI), said the mortgage market is unlikely to recover until consumers had some certainty about the financial hit they are set to take in December's Budget. "We are looking at a fairly weak market this year and next year unless something big happens which can bring about certainty," Dr Duffy said. Uncertainty around the global economy is also holding back buyers from committing to a massive purchase like a house. ...

Struggle to pay bills is about to get much worse... With a swathe of EU interest rate hikes coming our way, mortgages will shoot up by thousands of euro a year: THE President of the European Central Bank (ECB), Jean-Claude Trichet, shocked us all last week when he suggested that the next ECB rate hike could be as early as this April. There are already 60,000 homeowners struggling to pay their mortgages. With a raft of European interest rate hikes on the cards, many of them will find it even harder to pay their mortgage in a few weeks' time -- and tens of thousands more homeowners will share their fate. We all knew that the ECB interest rate -- which influences the amount of interest you pay on your mortgage -- was on its way up. Yet surging oil prices and a pick-up in eurozone inflation mean this rate hike will now happen a lot sooner than we ever expected. Some economists believe the ECB rate could increase four times this year. As the ECB rate has been at an all-time ...

WELCOME TO THE HOUSE OF PAIN: The ECB headquarters in Frankfurt... What will the ECB rate rises mean to your mortgage? THE Independent Mortgage Advisers Federation (IMAF) has done the sums to show how much more you will pay for your mortgage if the ECB rate rises. The figures assume that the ECB rate increases by 0.5 per cent to 1.5 per cent by the end of this year -- and by another 1 per cent to 2.5 per cent next year. The figures also assume that lenders pass on the full extent of the ECB rate rises to standard variable customers. (ECB rate rises are automatically passed on to tracker customers.) €200,000 MORTGAGE €2,200 a year more If you've a 25-year standard variable mortgage of €200,000 with Permanent TSB, your mortgage repayments work out at €1,191 a month. If the ECB rate increases by 0.5 per cent, your monthly repayments will increase to €1,251 -- another €60 more a month, according to Michael Dowling of IMAF. If the ECB rate hits 2.5 per cent by the end of 2...

Mortgage bid to unlock market could backfire... NEGATIVE equity is the scourge of homeowners who bought their houses in the past few years. By the end of this year, as many as one-in-three mortgage holders are expected to be in negative equity -- where the value of their home has collapsed to such an extent that they owe their lender more than it is worth. Economic and Social Research Institute (ESRI) economist David Duffy made the estimate based on house prices having fallen by 30pc from the peak of the housing boom in 2007. But most commentators say that house prices have fallen by around 50pc from the peak. In that case, the ESRI estimates that some 350,000 homeowners will end up in negative equity this year. Being in negative equity means you cannot sell your house to move somewhere else. This is because you will still owe the bank more than the sale price of the home. Banks will not normally allow you to sell up in that situation. This is why Ulster Bank and EBS Building Society a...

The mortgage debt crisis in this country is much worse than the banks' official figures would have us believe... A report published two weeks ago by prestigious think tank Organisation for Cooperation and Development (OECD) on the mortgage crisis here was unambiguous. For a dozen years, Irish house prices raced ahead at the fastest rate and for a longer time than anywhere else in the world. When the bubble burst in 2007, it left Irish households facing – along with the Dutch and the Danes – the highest family debts in the world. A bird's eye view of OECD housing markets by Christophe Andre reveals that Irish house prices since the 1970s were many times above the prices in Britain, Netherlands, Spain and France. Some years, several countries experienced house price booms simultaneously, said Andre, who defines a boom as prices having increased by 25% or more over five years. Doubling of household debt But since 1995, 13 countries of his sample of 17 countries simultaneously sho...

Over 33% of claims to relief scheme not paid... MORE THAN one-third of people who applied to the Government for emergency welfare support to help pay their mortgage last year did not receive a payment in 2009. Figures released by the Health Service Executive (HSE) show 13,469 of the 18,443 people who applied for mortgage interest supplement payments in 2009 were granted relief. The remaining 4,974 people were either refused support, withdrew their application or are still awaiting a response from community welfare officers. The scheme operates to provide support to people unable to meet their mortgage repayments due to a change in circumstances, such as loss of a job. Under the scheme, households receive an average of about €365 every month to help them cover part of their repayments. There has been a sharp rise in the number of people receiving mortgage interest supplements since the recession took hold. At the end of December 2009, the number of people availing of the scheme was 15,1...

Over 30,000 homeowners renegotiate mortgages... More than 30,000 struggling homeowners have negotiated alternative mortgage repayment options with banks and building societies in a bid to hold onto their homes, according to estimates from the Irish Banking Federation. A spokesman for the IBF said that mortgage customers in financial difficulty had negotiated a range of agreements with lenders, including payment breaks, longer mortgage terms and interest-only periods. ‘‘Things are difficult and people are under pressure, but it’s a case of picking up the phone and discussing the options with your lender in good faith," he said. The IBF will launch a new consumer guide to dealing with mortgage repayment difficulties this week. It recommends that mortgage customers in financial difficulty should contact their lender as soon as possible, and be sure to respond to letters or phone calls in relation to arrears. Under the statutory code of conduct on mortgage arrears, lenders must wait a...

Thousands at risk of rate hikes as AIB bars mortgage switchers... THOUSANDS of homeowners are effectively trapped with their existing lenders after the biggest bank in the country, AIB, admitted yesterday that it no longer accepts mortgage switchers. Just two lenders will now accept switchers, leaving thousands of homeowners trapped and vulnerable to being hit with higher mortgage rates. The AIB move is a huge blow to mortgage holders who are with Permanent TSB as it has increased its mortgage rates twice in the past six months, and those with Halifax, which is closing its retail operations here. AIB has the lowest home-loan rates in the market, with a standard variable rate of as low as 2.25pc and a three-year fixed rate of 3.19pc. In comparison, Bank of Scotland (Ireland)/Halifax has a three-year fixed rate of 7.25pc. Permanent TSB shocked homeowners this month when it pushed up its standard variable rate for existing customers by 0.5pc. Other lenders are now expected to follow the m...

The fall in house prices left many homeowners in negative equity, but this need not necessarily prevent you from trading up... IT'S the topic no one wants to talk about, but this elephant has no plans to leave the room. Negative equity happens when the value of your property on the open market amounts to less than the sum of your mortgage. If you bought a house within the past five years, you are likely to be in negative equity to some degree. The average household is sitting on negative equity estimated at €43,000, according to Irish Independent calculations based on a recent report by Goodbody Stockbrokers. It was estimated that 116,000 households were in negative equity at the end of 2009, rising to nearly 200,000 by the end of this year, according to the Economic and Social Research Institute. However, this is a conservative estimate based on prices falling by 24pc from their peak in 2007. If house prices end up falling by 50pc, this figure would rise to 350,000. It is general...

Pressure on State to stop repossession of homes... There is a "substantial" number of new mortgage holders who should never have been approved for the amount of money they borrowed and repossession orders should not be granted to their lenders, proposals to Finance Minister Brian Lenihan and the Oireachtas committee have urged. A group, whose aim is finding a way to assist thousands of families who face the "very real threat" of losing their homes because of mortgage arrears, said the terms of loans should be amended to what the borrower can afford. The Prevention of Family Home Repossession Group has made submissions to Mr Lenihan and the Joint Oireachtas Committee on Finance and Public Service on a variety of measures to deal with the problem. They have also warned that many families will find themselves in a poverty trap with a deteriorating economy, spiralling unemployment and the prospect of interest rate rises . "This has the potential to lead to catastro...

The 10 new rules for first-time buyers... 100 per cent mortgages are gone, so are long-term loans – and the easily-flipped starter home is a thing of the past... WITH HOUSE prices down by as much as 50 per cent, property has never looked as affordable – or has it? While prices may have plummeted, people’s incomes have also been slashed, due to a combination of higher taxes, pay cuts and the disappearance of discretionary income such as bonuses, while getting a mortgage has become more difficult as banks tighten up their lending practices. Nevertheless, the collapse in prices means that first-time buyers are slowly coming back to the market. But what lessons should they have learnt from the crisis? 1 ASKING PRICE NOT SALE PRICE What’s a house or an apartment actually worth these days? In the absence of official sale price data and with estate agents prevented from publishing prices (house prices are covered by the Data Protection Act) it is difficult to find out what is is really happen...

25,000 families now face losing their homes FEAR: No more breathing space on mortgages... UP TO 25,000 home owners face the chilling prospect of having their homes repossessed because they have fallen significantly behind on mortgage repayments. Irish Life & Permanent (IL&P), which has a 25pc share of the home mortgage market, has confirmed that 6,122 loans are now three months or more in arrears and it is estimated that up to another 20,000 mortgage holders with other lending institutions are in a similar position. Under the State bailout arrangement, banks had agreed to give all mortgage customers one year's breathing space before repossessing. But, for many, that deadline is now imminent. New legal orders coming in to effect on October 1 will make it easier for District Courts to grant uncontested repossessions, which is likely to increase the number of homes being taken over by banks. Under the same act, contested repossession cases will be heard in the Circuit Court ra...

House buyers were given 100pc loans during crash... Irish banks agreed to provide 100pc mortgages to one-in-four young first-time buyers last year despite a collapse in the property market. Thousands entering the property market for the first time took out mortgages with loan-to-value ratios of over 95pc with up to 5,000 taking out the 100pc housing loan. The Department of the Environment's Housing Bulletin 2008 also revealed that the average age of those who successfully obtained a 100pc mortgage was 31 years. These loans were taken out for between 31 and 35 years, which would indicate that people would be paying back the cost of their home until they retire. Banning Earlier this year, the Financial Regulator said it was considering banning 100pc mortgages and restricting lenders offering homebuyers loans greater than three times their annual salaries. This followed the publication of a report by the British financial regulator which said there was a case for limiting the size of ...