Northern Ireland house crash 'among world's worst'

steveymp

saverbuyer wrote: »

And all the while they will be paying interest on the debt. A house the bought for 100k would have cost 200K with interest over the mortgage.

If there was no bubble it would have cost 50K and cost 100K over the mortgage. Saved 100k to invest in productive parts of the country.

But his views on "it would be my pension" is typical. Its shelter plain and simple.

Yeah his "Pension Plan" seemed a bit strange indeed, A home is a roof over your head as you say and that's it. I did feel really sorry for him thou and others in his situation.

saverbuyer

steveymp wrote: »

Yeah his "Pension Plan" seemed a bit strange indeed, A home is a roof over your head as you say and that's it. I did feel really sorry for him thou and others in his situation.

I do too but not people who used the house as a cash machine taking the equity to fund a lifestyle.

Mistral001

steveymp wrote: »

Spotlight (Tuesday night, repeated last night) You really have to feel sorry for people trapped in negative equity and the fact they could be in it for the rest of their lives, providing they keep up the payments, is very scary indeed. Some poor souls will lose their home and still be in debt.

I was a bit confused by this part of the programme. I lived in London during the property crash in 1991 there. I knew some people who got caught in negative equitity. they just moved out and threw the keys of the property in the letter box of the building societ. They got black-listed from getting another mortgage for 5 years I think, but that ended their negative equity and their mortgage payments as far as I know. Morally I am not with that, but I have never been in that situation, so hard to say what I would do if I was.

saverbuyer

Mistral001 wrote: »

I was a bit confused by this part of the programme. I lived in London during the property crash in 1991 there. I knew some people who got caught in negative equitity. they just moved out and threw the keys of the property in the letter box of the building societ. They got black-listed from getting another mortgage for 5 years I think, but that ended their negative equity and their mortgage payments as far as I know. Morally I am not with that, but I have never been in that situation, so hard to say what I would do if I was.

It's because the banks took the choice not to pursue lots of people who did this during the last crash. All loans are recourse loans so the bank can pursue you for the shortfall between sales price and mortgage prices. It’s their call.

The only escape then is bankruptcy

Sorry forgot to say this happens a lot in America where the loans are nonrecourse i.e. you can give the asset back and won’t be pursued for the difference. Developers getting chased for personal guarantees are another example of recourse lending.

tara747

saverbuyer wrote: »

And all the while they will be paying interest on the debt. A house he bought for 100k would have cost 200K with interest over the mortgage term.

If there was no bubble it would have cost 50K and cost 100K over the mortgage term with interest. Saved 100k to invest in productive parts of the country.

But his views on "it would be my pension" is typical. Its shelter plain and simple.

In fact, if they had saved a deposit, their mortgage would have been less than £50k :cool:

Mistral001

saverbuyer wrote: »

It's because the banks took the choice not to pursue lots of people who did this during the last crash. All loans are recourse loans so the bank can pursue you for the shortfall between sales price and mortgage prices. It’s their call.

The only escape then is bankruptcy

Sorry forgot to say this happens a lot in America where the loans are nonrecourse i.e. you can give the asset back and won’t be pursued for the difference. Developers getting chased for personal guarantees are another example of recourse lending.

Thanks I did not know that and would expalain a lot in my view. So the banking world is in a different place in NI and GB these days and they have to play hard-ball.

Interesting that the USA mortgages are like that. Not surprising as it was the Americans who borrowed too much in the first place and kicked off the whole borrowing mania. Lots of Norn Iron people going to visit their American cousins who were borrowing like crazy to build big homes and coming back here thinking the could do the same. nobody told them that they have a different mortgage system here to that of the USA.

A.L.D.A

saverbuyer wrote: »

There is no demand really, remember transaction levels are at 60% off peak and repos now account for 40% of the market. This demand you quote really can't be seen on the ground. In the UU repost there were 70 more sales than the previous quarter. Hardly a massive increase.

Firstly how many empty houses are there in Ardoyne? Very few I can see. So there is a need for the units that are there. There is a high demand for rental in the area. (I agree about bloated amounts)

How many of those houses have adult children living with parents? That is one of the reasons for all the illegal loft conversions!

Yes transactions levels are 60% off peak, but ask why. This is not a good indication of possible future demand, quite the opposite.

I do not want to suggest that everything is rosy it plainly is not. With a bit of luck we may get to a floor based somewhere around the 3.5 times earnings etc. I hope that happens. What worries me is that we have an understandable lack of confidence and restricted liquidity and that in turn will lead to some very negative consequences in the medium term. I think we are creating some serious problems.

It is the consequences of what is happening now that bother me. I think we have to step beyond comment on what is the now, that is easy. We have to ask where this is leading and that is a lot harder.

saverbuyer

A.L.D.A wrote: »

Firstly how many empty houses are there in Ardoyne? Very few I can see. So there is a need for the units that are there. There is a high demand for rental in the area. (I agree about bloated amounts)

How many of those houses have adult children living with parents? That is one of the reasons for all the illegal loft conversions!

Yes transactions levels are 60% off peak, but ask why. This is not a good indication of possible future demand, quite the opposite.

I do not want to suggest that everything is rosy it plainly is not. With a bit of luck we may get to a floor based somewhere around the 3.5 times earnings etc. I hope that happens. What worries me is that we have an understandable lack of confidence and restricted liquidity and that in turn will lead to some very negative consequences in the medium term. I think we are creating some serious problems.

It is the consequences of what is happening now that bother me. I think we have to step beyond comment on what is the now, that is easy. We have to ask where this is leading and that is a lot harder.

Liquidity in what sense though? Mortgages are available for people with a 10% deposit or no deposit with Northern Bank. How much more liquidity do you want? Banks are lending.

Average household size is 2.5. That means there are on average 2.5 people living in a dwelling. 1 third of all housing benefit recipients live on their own. The figures do not back up you lack of demand arguments.

I remember reading a report by DSD (I'll try to find it) that stated we would need to build 200,000 housed between 2008 and 2018. There was a lot of argument on the report because the figures were miraculously increased by 25% from the previous year. We had 9,000 new build complete last year. Way down from peak but still we would be meeting the previous market; with a little effort we would meet the dubious revised target.

Remember there are also thousands ghost units, 50,000 vacant units and a large number of older people living in big houses on their own. There are several thousand houses for rent and sale on property sites.

Social housing had to build 1800 units to meet demand, this year they had around 2300 completions. More than meeting demand.

I suggest you wait on the latest census figures ALDA but at the moment no one could argue the fact we have plenty of housing stock.

Mistral001

I saw the Spotlight programme last night (got the repeat on BBC2 as well).

I found it refreshingly imformative. Good to get some serious reporting and interviews with people that have their finger on the pulse. Looks like the BCC NI have finally wakened up to the fact that serious business reporting matters to their viewers.

The Nama bit fasinated me. Never heard of it before.

As for the interviews with the guy who blamed the bank for lending him too much money and the interview with the couple from Dromore who were worried about not making a huge profit they thought they were going to make (but still not make a loss), that was just BBC NI reverting back to old-style reporting and they will be forgiven for their lapse there as it only took up a small part of the programme. BBC NI keep it up I say.

A.L.D.A

saverbuyer wrote: »

I remember reading a report by DSD (I'll try to find it) that stated we would need to build 200,000 housed between 2008 and 2018. There was a lot of argument on the report because the figures were miraculously increased by 25% from the previous year. We had 9,000 new build complete last year. Way down from peak but still we would be meeting the previous market; with a little effort we would meet the dubious revised target.

Don't worry I have read it. The figure of 20,000 (plus 2000 for those falling into total disrepair) goes back a fair bit before 2008. Those figures I think start somewhere in the Planning Services.

This may be of use Table 216

http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/housebuilding/livetables/

We built completed 8040 last year but starts are trending towards 6000.

If the figure of 20,000 was correct we have NEVER built that number in any year. I prefer a more pragmatic approach, how many houses and how long is the realistic life expectancy coupled with population trends. None of the reports I have read impress. There are also a lot of houses and 'apartments' that I would consider unfit. They should never have been allowed. 6 tiny apartments in a Victorian terrace house, you wouldn't believe some I have seen.

I agree about the dole drops, really annoys me that a system allows someone to claim to be living separately, taking up a unit that someone could well need so that they can get a few extra pounds. They are less prevalent than they once were so maybe there is some tightening up.


Does anyone know of a good place to get figures related to mortgages issued in NI. I can get UK figures from Bank of England. Not trying to score any points, but would help us all get a better feel of what is happening here.