Pat Kenny had Irish Mortgage Brokers on the show to discuss NAMA, their role in building new housing and to consider some of the positives and negatives of this approach.
Scott and Venetia had us on their show to discuss the property market and to go through some of the things that are affecting it.
They also found out how much he paid for his last haircut and a few other unusual things that you don’t normally hear on radio!
We were pleased to be part of a discussion with Matt Cooper (Today FM) and Kevin Doyle (political editor at The Independent) on the topic of housing on The Last Word.
The analysis we provided was to make the point that help to buy cannot possibly be behind house price increases across the nation. We also made the point that prices would have risen even without it and that you need to look at the secular trend not just the short term ones.
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 …
Yesterday Revenue announced the details of the new ‘help to buy’ scheme. It is designed to make buying a home more realistic for first time buyers and to increase the supply of new homes. Whether it’s a good or bad idea is beside the point, what most people want to know is how it works so here’s the breakdown.
It’s a scheme to allow first time buyers buying a new home to get a rebate of up to 5% of the purchase price or contract price (whichever is the lower) from income tax and DIRT tax paid in the past four tax years to a maximum of €20,000. The property must cost less than €500,000 or 600k for retrospective applications, the size of the loan versus the value of the property must also be 70% or more.
So, for every €100,000 of value you must be borrowing at least €70,000 the idea being that very cash rich buyers don’t need this help. It started on the 19th of July 2016 and goes until the 31 Dec 2019.
Now that it’s …
We were part of a panel discussion with Matt Cooper on the ‘The Last Word’ the day the Central Bank rule changes were announced.
The panel consisted of Charlie Weston from the Irish Independent, Brendan Burgess from AskAboutMoney.com and Karl Deeter of Irish Mortgage Brokers.
There were differing views where the for/against was clearly laid out and the concerns about whether it’s a good idea.
We were asked for a comment on the Central Bank switching report by RTE News at 6. We believe it is telling us what many already intuitively know, that by being assertive and moving away from lenders who charge more that people will ultimately save money.
There is a counterbalancing argument about the savings being estimated over the life of the loan, but equally, the report doesn’t factor in switching contributions which could sway it back in favour of moving from expensive providers to lower cost lenders.
We spoke with Mary Wilson of Drivetime on RTE about mortgage rates and what the implications were of the changes Michael Noonan (Irish Minister of Finance) announced that day. We also read through the Central Bank report on the subject and considered the findings of their analysis in terms of the impact it might have on borrowers.