Generation Rent? Try generation Broke

It bothers me when people promote long-term renting as a better choice than home ownership because it belies some basic facts.

When I was studying accounting, I was taught to be accurate. When I was learning about financial advice, I was taught to be prudent. Yet both of these concerns are often cast aside when debating the benefits of buying versus renting.

Nationally we are at an important juncture. It’s acknowledged that huge numbers of people won’t be able to afford to buy a home. If this proves to be true, many will also be locked out of one of life’s most wealth-creating activities.

The first problem is the nature of the comparison. If rent is €1,300 a month and a mortgage costs €1,500, then it’s cheaper to rent, right? Well . . . no it isn’t. The outlay is less, but the actual cost of the provision of occupancy is the rent versus the interest portion of the mortgage, not the entire payment. I will explain that point.

People often say rent is dead money. To be fair, so …

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Newstalk: Karl Deeter on the Pat Kenny show discussing pensions

The Pat Kenny Show on Newstalk had us on to talk about the future of pensions and to help people understand some of the looming issues in the retirement space.

It is a complex problem which is affected by everything from home-ownership to central bank interest rates. The main thing to take from it is that everybody who can start a pension, no matter how small, should do so. One of the biggest issues is the fact that people don’t even have one they can contribute to.

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The unaffordability index of Irish housing

This picture speaks a thousand words and in many cases tens of thousands of earnings that a person would have to have in order to afford an average home in different parts of the country. We used recent data from the Daft report and then broke it down into borrowings and compared that to average wages.

The column after ‘county’ is the average price in that region. If we assume a first time buyer will typically want a 90% mortgage we then look at the amount of earnings they’d need to have in order to get the loan.

The last column is where the real story lies, it compares prices in the area to average wages taken from the CSO.

Anything in a white cell with a minus is very affordable, anything in black means you’d have to be earning above average wage to buy a property in the area.

If the cell has a red background that is showing you where the difference is greater than €10,000.

It’s fairly clear that cities and in some cases …

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Newstalk: Breakfast show speaks to Irish Mortgage Brokers

We were pleased to feature on Newstalk’s ‘Breakfast Show’ this week, to our surprise we became an association! To clarify, that was just a title oversight by the presenter, we are still our plain old regular selves working as brokers.

The piece was questioning the validity or need for first time buyer type grants and what it could mean for both buyers and the industry.

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Thankfully there isn’t any Tsunami when you consider hard facts

There has been an ongoing commentary about ‘Tsunami’s’ of repossessions that are occurring right now or just about to and we have been part of what we feel is a more realistic interpretation of the facts.

Yes, people have lost their homes and more will, that is always part of the outcome after a massive financial crisis, one of the largest ever, and in a nation that set records for the size and scope of their financial problems.

To think it could be any other way is the same as expecting a health system where nobody ever dies irrespective of the problems they may have. That kind of belief is not rooted in reality.

We think that the correct response is rapid and fair intervention where warranted, and zero protections where properties are abandoned and no payments are being made.

Within this vista there are those who would have you believe the world is being torn asunder and nobody is doing anything about it.

Here are some of the statistics from the courts covering the first quarter of 2016.

New …

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What the Central Bank said about cases in arrears that are in the court system

Below is an email excerpt from the Central Bank on the area of court proceedings. We get frustrated with misinformation about stadiums of people doomed to homelessness and sums up around 20,000 court proceedings being bandied about. They are bad numbers and should be ignored, however, it doesn’t stop people from repeating things that are wrong.

There is also the information (not yet public as far as I know) from the Court Service which indicates the live number of cases in the system at the end of the same period was 12,252 again, nowhere near some of the figures that were being trumped about at the time.

(email below)

> From: CentralBank <*****@centralbank.ie> > Date: ** April 2016 at 15:18:19 GMT+1 > To: ********** > Subject: RE: Clarification of Quarterly Arrears Stats > > Hi *****, Somebody else has just come back to me with a more useful answer for you: The figure for PDH mortgages – at end-December 2015-there were around 13,500 accounts for which court proceedings have been issued (and have not yet concluded). > > …

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Opportunists preying on fear are the real vultures

This was a joint opinion piece by Karl Deeter of Irish Mortgage Brokers and Ross Maguire of New Beginning. Ross is a Senior Counsel and a highly skilled professional in the area of property rights. The point being raised was that property rights and contractual obligations are very well set out in Irish law.

There are those that would have you believe that a person or company can buy your loan and suddenly turf you out, that simply isn’t the case and is factually incorrect. We refer to people sending out that kind of nonsense as being mandarins in the ‘Ministry of Fear’ and make the point that the facts matter.

The full article can be read here.

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