2014 irish loan number by quarter

Only 2,800 first time buyers would have been affected…

Patrick Honohan told the Oireachtas committee a few days ago that “2,800 mortgages issued in 2013 would have been affected by the proposed new lending rules”.

There are a few reasons why this is bad use of data. For a start, in 2013 in gross numbers there were 14,984 mortgages drawn down. If you strip out re-mortgages, switchers, top ups and investment loans to get an idea of the actual ‘home purchase’ group it comes down to 12, 875 which means 22% of all loans.

Secondly, 2013 is a low level year in lending, the charts below show the draw-downs and the number of loans, they are at anaemic levels and don’t show any sign of a credit bubble in a country that is still rapidly deleveraging.

How can this be interpreted as a rising risk? The rising prices are a separate issue, but that some wave of credit is ready to swamp down on limited supply denies the fact that most of the market is in …

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RTE Primetime: Homelessness crisis – a housing problem 24th November 2014

We took part in a panel discussion on homelessness and more importantly in the rise in rough sleepers. This issue was made worse by government policy and the reduction in low end housing at the same time as there was no investment in social housing.

We tried to point out that there are consequences to many policies and that were introduced such as rent allowance cuts in the past.

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RTE Radio 1: Talking Money, how to ‘beat the bank’ with Karl Deeter & Jill Kerby

Last week on ‘Talking Money’ Mary Wilson spoke to Karl and Jill about ways to ‘beat the bank’. In an era of low returns and higher costs on credit and use of the financial system beating the banks becomes an important aspect of finances because of the amount of interaction most of us have with banks.

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Primetime RTE Standard Variables

Primetime: excessive interest rates

Last night’s Primetime had a well thought out piece on variable interest rates.

The general thesis was that variable rates are ‘too high’ and that banks should not be allowed to charge them, the figure of 1% of a ‘cost of funds’ was mentioned several times and various suggestions were made as to making the banks stop the practice of setting their own prices.

To begin with, the ‘cost of funds’ at 1% may be what a bank buys their raw materials at, but then you have to make more on top of it to allow for operational costs, to provide for losses, regulatory burdens, margin and the like. It is worth noting that in AIB’s interim statement which was only made yesterday that they noted that “Net Interest Margin (NIM), excluding ELG, expanded to c.1.64% year to date (YTD) September 2014″.

This means the idea of 4.5% minus the 1% ‘cost’ equating to a 3.5% ‘profit’ doesn’t stack up. If it did the net interest margin …

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RTE Drivetime: Talking Money on pensions (week 2)

In the second instalment on pensions we looked at the situation people may find themselves in if they have waited until their 40′s or 50′s to start saving towards retirement. There are some scary valid concerns but also some good news when it comes to retirement provision started late.

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RTE Drivetime: Talking Money on pensions (week 1)

On Monday the 27th of October we had the first of two parts about pensions, the focus this week was that people are passing up money that is on the table for the taking. The other issues were about the kind of advice you get, and the best ways to structure your pension as well as to demonstrate the available funds if you save for retirement. 

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Central Bank mortgage caps calculator

Central Bank Mortgage Cap Calculator: did you get shafted?

We have designed a simple calculator that lets you put in your property price, what rents you are currently paying, how you think prices will change and how many years it would take you to save a 20% deposit if you only have 10% now.

Just download the excel file, fill in the bright yellow boxes on the first sheet, and then scroll down to the green area to find out if you win or got shafted. (download here)

You can play around with different scenarios, but suffice to say that a regular couple who have €25,000 saved up and are looking to buy a property for €250,000 today will be worse off if rents and property prices went up by 2% a year (and it took them 4 years to save the additional deposit required) to the tune of €15,500.

We don’t believe it is in the remit of the Central Bank to damage the balance sheets of financially healthy individuals, but you can test your own hypothesis and see how it …

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RTE Drivetime: Mary Wilson speaks to Irish Mortgage Brokers about Budget 2015

We spoke with Mary Wilson on Drivetime about the Budget 2015 announcements and agree that it wasn’t a ‘budget for builders’ because it was more like a budget for land bankers.

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