Dublin puts blame on Airbnb… again

The new protocol is whatever the issue is blame it on Airbnb.

Airbnb is being blamed for causing the housing crisis in Dublin. Critics are saying that the up and coming ‘hip’ way to travel site is causing apartments and houses that would be long-term let into short-time let. The site apparently contributing to Ireland’s housing shortage by taking housing off the market.

Policymakers and businesses has started a trend worldwide of blaming this short-term rental site for economic and societal problems with little evidence to back it up, claims Mark Paul from the Irish Times.

Ireland is not the only blaming Airbnb, New York has hotels (Airbnb’s competition) lobbying politicians left and right. Italy accused Airbnb of turning the country into a theme park.

Such problems are linked to issues in Venice from Airbnb, supposedly. With landlords making more money in a week from travelers compared to long-term lets in a month; therefore, the landlords are increasingly turning their properties into Airbnb listings. Venice being such a small city, there is not many places to rent in the first …

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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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Bank of England raises counter-cyclical capital buffer to 0.5%

Bank of England announced to lenders that it is raising the country’s counter-cyclical capital buffer from 0 to 0.5% to mitigate pressures from increasing consumer credit. The counter-cyclical capital buffer is a requirement on all banks, lenders and investment firms to keep a certain level of capital when credit growth is excessive. To a certain extent, this buffer is able to insulate banks from the cyclical growth and downturns of the economy. Bank of England’s decision reflects its interests in slowing down credit and lending in the British economy.

 

By raising the counter-cyclical capital buffer to 0.5%, British banks must increase their held capital by over £11.4 billion over the next 18 months. The Bank of England also has the intentions of further increasing the buffer by 0.5% to 1% by the end of 2017 to combat increases in consumer credit and lending. The counter-cyclical buffer has only been used once in the UK, but was quickly revoked due to stagnate economy conditions during the immediate aftermath of Brexit.

 

Bank of England’s Financial Policy Committee warned that there …

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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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Proportion of buyers with mortgages surpass those who buy in cash in first time since market crash

Recent data reveals that the percentage of home buyers with mortgages have surpassed that of those who buy in cash. This is the first time this has happened since the property bubble and subsequent crash. On July 26th 2016, an Irish Independent/Real Estate Alliance survey reported that 60% of houses are bought with cash, now, roughly a year later, the same survey concluded that less than 30% of homes are purchased by cash buyers.

 

During the years after the housing crash, the high percentages of cash buyers was caused by higher interest rates, stricter restrictions on lending, higher rates of unemployment, and the large amount of speculators purchasing properties as assets after the original home owners have defaulted on their loans. This indicated a general distrust in the market and the squeezing out of mortgage buyers who have defaulted on their homes.

 

Central Bank economist Dermot Coates predicted in 2016 that the proportion of cash buyers was “neither sustainable nor likely to continue into the future”. …

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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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House prices to increase for up to 10 years

The Daft.ie report stated that the first six months of 2017 in Ireland the house prices has risen more than all of last year. They will continue to rise for the next five to ten years unless signification measures are taken.

The house prices are moving up 12 percent higher than a year ago with an average of €2,000 a month. This leaves Dublin on the forefront of the housing increase.

Housing prices increasing means more people wanting to sell their home with more than 6,000 homes listed for May. That has been the highest total since middle of 2008. However, this increase of property for sale is not even close to meeting the demand of the market.

With the government reviewing the Help-to-Buy scheme, fear comes as this may lead to another surge of people wanting to buy.

A Daft.ie economist Ronan Lyons warns the rates in Dublin are going to increase faster than any other part of Ireland. He said this was because, “we’ve regulated ourselves out of the volume of homes that are needed”.

The possible cause …

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Is there or is there not another housing bubble?

In reference to No evidence of another Irish housing bubble, IMF says by Peter Hamilton on 26 June 2017 in the Irish Times.

The answer is no but close monitoring is needed. A Washington-based company, the International Monetary Fund (IMF), has confirmed there is no housing bubble in Ireland. Even with the quickly rising prices of property and an increase of mortgage approvals, IMF realizes this is significant but it is not a housing bubble… yet.

There is no statistics to show there is an imbalance of the pricing of houses. However, there is an increase demand for housing that could lead to an imbalance, especially with the Central Bank’s mortgage lender rules and the help-to-buy scheme for first timers. IMF has recommended close monitoring of the market to make sure a bubble is not formed.

The likeliness of this increase of housing demand should …

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Bank of England limits consumer lending & borrowing

Bank of England has voiced concerns over the increasing level of consumer credit in the UK, and has instituted various restrictions on banks regarding capital buffers, mortgage lending requirements and stress testing.

 

Levels of consumer debt have been rising rapidly, well beyond the rise in income, and bank lending has facilitated it’s growth. Since last April, personal lending has increased by 7% and credit card loans have risen by 9%.

 

The central bank expressed concerns in its most recent financial stability report that lends have grown used to benign economic conditions, and thus have loosened their lending standards. The Bank of England’s Financial Policy Committee warned that though current risks to the financial system remains low, banks should still remain watchful for shocks that could be caused by economic downturns.

 

It has asked banks to increase their capital by £11.4 billion over the next 18 months, thus having a greater buffer if an economic downturn causes a shock to occur, and …

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