Judging from cost of living pressures on living wages is wrong

Ibec has claimed that the living wage is not an accurate way to assess cost of living pressure and is a structurally wrong concept to begin with.

The living wage puts a lot of pressure onto the business. Whether the business’s are able to pay is not accounted for in the living wage. This was following the Living Wage technical group, who sets the living wage figure, increased it by 20 cents to €11.70 in Ireland for 2017.

The reason for the increase? It was accounting for the current housing shortage and the increased rent levels.

This is different than the minimum wage set at €9.25 and set by Government’s low pay commission.

The living wage was created in 2014 updated every July. It is ideally the set average wage for full-time employees to cover the minimum cost of living.

It is set by the Living Wage technical group. They consist of researchers and academics and directed by Vincentian Partnership for Social Justice.

It is priced by many factors which include: health insurance cost, food cost, Universal Social Charge weekly …

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Millennials are less likely to move more than other generations

The millennial generation in America have been moving less frequently than before. 11.2 percent of Americans moved homes from 2015 to 2016 which is the lowest since the start of the Census in 1948. Before 1985, more than 20 percent of Americans were moving in a year but the rate has been declining since then.

Richard Fry of Pew Research Center believes one of the factors for the lower moving rate for millennials is the difficulty of owning a home. After the housing bubble burst of 2008 the stricter lending regulations combined with high student debt can make it difficult to obtain a loan to buy a house. Buying a house is another reason people would want to move.

Richard Fry also thinks it’s because of the relative immobility of millennials. 25-35 year olds are moving slower than people of the same age for the past 50 years. This is surprising considering they have lower …

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Mortgage update on the UK: First-time buyers average deposit is rising

In the UK, the average price for their first-home has hit a record high at £207,693. As well as nearly half of all buyers of homes are first-time buyers. Within the first six months of 2017, the number of first-time buyers are at 162,704. This is only 15 percent below the peak of 2006.

On average £33,000 are needed for deposits for first-time buyers.

London we see even worse housing increases at an average deposit for first-time buyers at £106,577.

Northern Ireland is hitting the lowest spot at an average of £16,457 of deposits, Wales at £17,193, and Scotland £21,565.

Like our Help-to-Buy scheme in Ireland with tax rebates of up to 20,000 euro, the UK has a program similar. Their Help-to-Buy scheme with the low mortgage rates gave first-time buyers a push to buy. That could …

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Pepper Group may be bought out

A financial services company from Australia has received €436 million offer to takeover from KKR, a New York private equity firm.

 

It is not KKR’s first time entering the Irish market. Pairing up with the Ireland Strategic Investment Fund they set up a €500 million fund to finance the residential property development.

 

KKR bought Avoca Capital back in 2014, a credit investment manager in Europe located in Dublin, that was managing €7.05 billion of assets at the time.

 

Now they are looking at taking over the Pepper Group. Pepper entered the Irish financial services market about 5 years ago by buying GE’s Capital’s Irish mortgages.

Pepper has spread throughout Ireland ever since they bought around €600 million of subprime mortgages during the height of the financial crisis. Buying them at 40c on the euro which was backed by Goldman Sachs, a Wall Street …

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Switching your mortgage can benefit you in the long run

Switching your mortgage can be a hassle but is it worth it?

Yes. Switching your mortgage can save you tens of thousands, it soon may be less of a hassle as well.

The Competition & Consumer Protection Commission (CCPC) is realizing the benefits of switching and are looking of ways to take the hassle off the consumer. They currently are researching on how to make the process easier. They are taking focus groups from Dublin, Cork and Galway currently.

Of the research, the main drawbacks to people who switched were the amounts of paperwork, complicated, and too much time. Of those 35 percent estimated it took between one to two months while 24 percent said it took longer than two months. The CCPC proposed to start e-conveyancing with the Legal Services Regulatory Authority. It also proposed a start of automated switching process with the CBI and …

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Generation X still suffering the consequences of the housing crash

A mortgage lender offers 100 percent mortgage and a little extra for furnishing the home, why not take it? This before the housing crash seemed like a fool-proof idea. House prices were continuously rising and real estate looked like a safe investment.

Then the housing market crashed. House prices dramatically dropped while unemployment rate was rising. Suddenly Generation X now has negative equity on a home. They’re owing more on a home than it’s actually worth. What do you do?

Generation Xers, classified being born between 1965 through 1984, had a majority out of a job or have had a huge pay cut and having negative equity on a home. Massive tax cuts and the expense of childcare has taken over the disposable income.

Living in a generation of spending culture, during the time of economic growth they did not think to save for retirement. Now …

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Eoghan Murphy wanting to expand mortgage-to-rent

Minister for Housing wants to decrease rules on mortgage-to-rent (MTR) scheme to help expand the programme. Relaxing the criteria will dramatically increase the number of MTR homes.

The goal of the scheme to allow an option for people who can’t qualify for social housing.

How it works?

A group of investors will buy trouble mortgages and will let the houses to the tenants as a form of social housing.

The aim of the programme was to aid around 250 homes a year. Currently, the statistics have shown that from 2012 to the end of March only 240 have went through the programme. This is out of 3,672 applications submitted.

The reason?

This scheme can take up to an 18 month turnaround which is too long for a lot of investors.

To help out the scheme currently, a homeowner can surrender their home to the lender which goes to the Housing Agency. They can offer them an approved housing bodies (AHBs). Then AHBs buys the home and lets it to the borrower as social housing.

The revised version of MTR.

It …

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House prices are increasing now up to €1,000 a week, up from previous report

MyHome.ie just released a report than claims house prices are increasing more than the Daft.ie report. MyHome.ie report doubles Daft.ie’s findings, a rival website.

A greater focus on property prices in Dublin may be the reason for the vast difference in price increase especially because Dublin average monthly increase is more than €5,000.

The report also indicates the possible increase of prices are due to the Help-to-Buy scheme being reviewed for termination. Fear from first-time buyers are rushing them to buy houses before the cancellation of the scheme.

The Help-to-Buy scheme can provide tax rebates up to €20,000. The property prices nationally were up 8.9 year-on-year.

Conall MacCoille, author of report, said the huge inflation of house prices can be from job growth, high competition among homebuyers, and rising income. This as well as the Help-to-Buy scheme contributed to a rapid increase of house prices.

An increase of first-time buyer lending and relaxing of the mortgage lending regulations is also a factor.

MacCoille is predicting a rush of mortgage lending in 2017 if the Help-to-Buy scheme is phased out and the …

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Mortgage market update in the UK

The mortgage market in the UK after Brexit was announced has been shaky. With everyone not knowing how Brexit will turn out, they are weary of committing to huge financial obligations.

However, the UK mortgage market is starting to see potential buyers increase again. In May, a total of 121,464 mortgages were completed.

Total mortgage loans increased by £3.5 billion, which is the fastest pace in more than a year. Mortgage lending has increased 2.9 percent in the past year. The prediction for next years growth is 2 percent in 2017.

The slowdown in growth we can see come from the Brexit. The value of the Sterling dropping makes customers reluctant to purchase a house. This has very negatively affected the housing market in the UK.

The consumer credit card and personal loan debts have been on the rise as well. This is also causing worry from the Bank of England’s Financial Policy Committee as consumer credit continues to rise.

More regulations are going to be put in place to slow down the lending growth and another measure to be …

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Mortgage approval rates are surging

The amount of mortgages approvals increased by a third last month. The vast majority was first-time buyers.

With mortgage approval rates increasing, we can expect property prices to keep rising.

The Banking and Payments Federation figures also showed the amount of the approvals is increasing.

A reason for rapid increase could be from Eoghan Murphy, the Housing Minister, reviewing the Help-to-Buy scheme. This review is a result of the Help-to-Buy scheme being accused of inflating house prices.

The increase of approvals does not mean an increase in mortgage drawdowns, as finding a home increases in difficulty. With the housing shortage, houses for sale have multiple offers so you have to outbid the others.

Forecasts predict mortgage lending to go up from €5.7 billion last year to €7.5 billion this year. Within the next three years it might even reach €13 billion.

Mortgage approvals were up from 3,046 last May to 4,124 this May. That makes a 35 percent increase in a year.

We can expect to see an increase of competition among mortgage lending banks with lower interest rates or …

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