Also a little depressing for taxpayers, since they’ll end up owning a lot of this crud.
At least for once Charlie acknowledges that falling house prices are not always a bad thing.
But he still consistently fails to make the link between excessive house prices and competitiveness - we just won’t attract jobs here while the cost of living is too high.
Charlie always focuses on the individuals involved and fails to take account of the bigger picture. Maybe that’s his brief as “personal finance” correspondent? But playing the violins for the individuals caught out by the property boom (and we all know some of them) won’t help the country as a whole adjust to the new reality.
Apartments are the only active part of the market?
I think this EBS story is one of the most important property stories of the year. One element alone - the 85% LTV on urban apartments - in itself, it seems to me, fundamentally alters the market. In an instant the deposits required must slash potential selling prices of apartments and the knock-on from there across the market must be profound.
Could it be that with Banks tightening there mortgage application criteria, the amount approved would only purchase an apartment. Highly unlikely though as very few apartments going sale agreed down this side of the world
These young people were nothing more than cannon fodder in what was a truly disgusting period of Irish history.
How dearly the young pay for their naiveté.
I still don’t think the EBS have gone far enough to cover their risk.
Apartments are f*cked - theres no better word to describe it.
At the peak, something like 90% of all new builds were apartments.
There is a massive oversupply.
Couple this with the fact that Irish people prefer houses and its inevitable that prices will continue to fall.
So think about it.
An 85% mortgage means that if prices fall by more than 15% theres negative equity.
Anyone here want to bet we are less than 15% from the bottom ?
So who is going to be the first idiot to step forward and criticise the regulator?
Frank Fahy I’d expect.
why are these rules specific to first time buyers? why not all buyers? I would say that alot of trader uppers would have less disposable income than first time buyers what with kids, creches etc.
The only figure that should really matter is (documented income - outgoings for living expenses = what can be spent on servicing a loan). Easily done with a year or two of current account bank statements and credit card statements.
How many non-FTBs do you reckon are trying to buy apartments?
I asked someone who sold mortgages for a living about stress-testing once, and was bemused by the method. If you already have kids they factor that in (i.e. allocate a couple of hundred quid a month from your net income), but if you don’t, that’s fine - they assume you can afford more.
Would it not be reasonable to assume that most 20 and 30 something couples buying together who do not have kids are quite likely to have some during the lifetime of the mortgage? Apparently not
Hopefully Mr Elderfield and co. will get around to scrutinising the “stress testing” at some stage and ask some of these fundamental questions?
Yes, but the article says 85% of value, not price.
Wonder if they’re the same thing…
i mean for all mortgages, not specifically apartments…
I think if you had the view of the market that the regulator does then you’d see an awful lot of activity over the last few years was centred around FTBs and apartments. Sure we should have sensible guidelines for all mortgage types but you have to start somewhere and the apartment thing is a no-brainer.
its absolutely clear now, walls must be knocked through and apartments merged into bigger living spaces
Why does this new crackdown by the FR appear to be specific to EBS? What about the other lenders?
And why just FTB’s?
I don’t get it.