New housing plan fails to address the elephant in room

This article originally appeared in the Sunday Independent.

The Government's new housing plan has received a cautious welcome at best. There are good reasons for caution. 

Master plan: Minister Simon Coveney’s blueprint to solve the housing crisis has received a cautious welcome, but he has a mammoth task on his hands to make it actually work. Photo: Colin O'Riordan

Policies and zoning are behind high cost of homes in the capital but fixing the issue is a political quagmire, writes Colm McCarthy

The dysfunctional housing market was at the heart of the 2008 banking crash which brought down the broader economy and destroyed the solvency of the Government. It took several decades of policy mistakes to create the disaster and there will be no quick transit back to a rational and well-functioning system.

The key problem with Irish housing, whether owned or rented, is affordability, as the Housing Agency has pointed out time and again. If prices were affordable there would be no sense of crisis.
In most parts of Ireland this is happily the case - there is no housing crisis.

In Dublin and a few other urban areas housing is becoming unaffordable even for people with decent jobs. Lending more money than banks can prudently lend, or than purchasers can prudently borrow, is an evasion, a choice to finance the problem rather than solve it. It has been tried in the years up to 2007 and the Central Bank has wisely flagged that there will be no repetition.

Policy mistakes in many areas can simply be acknowledged and the failed policies reversed without great cost.

Things are not so easy when it comes to housing. An enormous edifice of long-term debt for some and an illusion of household wealth for others has been built on the foundations of house prices divorced from economic common sense.

A house in the outer suburbs of Dublin is currently priced at double, or more than double, the price of an identical dwelling in most provincial areas. There is no economic rationale for this disparity and it is entirely a creature of policy.

It is moreover a creature of two damaging popular myths. The first is that Dublin is a very large city, the second that there is an absolute shortage of land around Dublin suitable for residential use.

Dublin is not a large city. The population is a little over one million and there are numerous larger cities around the world where housing is affordable for most people.

There are some with equally dysfunctional housing policies and identical problems. Dublin city is surrounded by rolling prairies of empty land zoned for low-value agriculture, interspersed with small pockets zoned for housing.

These pockets have become vehicles for a destructive speculation industry which corrupted local government, has infected national politics and produced a banking system dangerously focused on long-term housing finance.

When it released the results from the April 2016 census last week, the Central Statistics Office prepared a map which shows the geographical distribution of vacant homes.

Excluding holiday homes, just under 10pc of the national stock was vacant on census night. But the vacancy rate varied hugely across the country, with vacancies over 25pc in many parts of the West and the North Midlands.

In Leinster and most of Munster vacancy rates are much lower, testament to the failure, during the housing bubble, to build in the areas of strongest demand. Not merely did Ireland build too many houses, they were built in the wrong places. An inevitable result is that houses are for sale in many areas at less than the cost of construction.

The Central Bank rules permit 90pc mortgages up to a house price of €220,000. There are parts of Ireland where it would be difficult to find a house that costs that much. In the Dublin area it is difficult to find very many that cost any less.

Salary levels do not vary greatly across the country, so the problem of affordability, whether for rent or purchase, is largely a Dublin problem.

An annual income of around €50,000 puts an individual into the upper reaches of the Irish income distribution. But this will not be enough to command a mortgage adequate to buy a starter home in the outer suburbs.

The housing plan fails to address this central issue of affordability in the Dublin area. Sky-high prices for properties in the fashionable inner suburbs are not the crux of the issue.

The excess price of modest homes in the outer suburbs and the surge in rental costs across the city are what matters. Reducing those prices back towards construction costs requires a steady increase in the availability of residential zoning on the city's outskirts and the allocation of all available land in the central areas to apartment construction.

Achieving this outcome will depress prices, inflame homeowners and damage the collateral value of mortgage loans, the principal component of Irish bank assets.

Indeed the long-term profitability of the banking system benefits from the survival of a dysfunctional housing policy in the Dublin region.

If prices bore a more realistic relationship to construction costs, negative equity for mortgage holders would be even more prevalent and the collateral value of bank lending undermined. It is not hard to see why the politics of fixing affordability is so difficult.

The plan contains some measures which will make matters worse. The planned reintroduction of the first-time buyer grant in October's budget, even if confined to purchases of new homes, will tend to stimulate demand and circumvent the Central Bank's lending restraints.

Despite the reservations of many housing experts, the local authority tenant purchase option has been reintroduced with even bigger discounts than were available in the suspended scheme.

This has the potential to deplete the available stock of social housing even as local authorities scramble to get construction under way again.

It provides a further incentive to get on the waiting list for local authority accommodation - with average rents around €50 to €55 per week the deal is already a bargain and a free option to buy out the property at up to a 50pc discount is quite a sweetener.

This scheme is likely to be particularly popular in the urban areas where the discount is most valuable, precisely where pressure on the social housing stock is greatest.

One method of financing social housing in Ireland is the so-called Part V requirement on builders to provide up to 20pc social units in each development, with the costs recovered through loading the price of the remaining 80pc.

In effect there is an earmarked tax on the purchasers of these homes, the proceeds going to pay for social housing provision off the Government's books. It would be fairer, and would help affordability, if this cost was levied on the generality of taxpayers.

There is also a host of charges and compliance costs dating from the days when local authorities could not levy any local tax on residential property. With property taxes reintroduced all homeowners, not just the purchasers of new ones, could reasonably be expected to share these burdens.

The largest elephant in the room remains the exorbitant, and policy-induced, price of building land in Dublin and a few of the other urban centres.

This problem will not be resolved until the planning and zoning restrictions which have contributed so much to the current crisis are addressed.

Sunday Independent:  New housing plan fails to address the elephant in room

Wilson Moore Estate & Letting Agents

When is the time to buy and how much do you want to spend ?

When is the time to buy and how much do you want to spend ?  

You’re currently renting and paying a high rent.  You would like to own your own home and an investment for the future.  It’s a big step and you’re keen to get the timing right.  The truth is everyone’s situation is different and no one can predict the future.  Sometimes people think it’s best to enter the market and buy a home when consumer sentiment is low as there can be good value available.  Once the economy improves and confidence returns this usually means that prices will start to increase. 

The next thing is to decide how much you want to spend on your home.  Setting a budget for your property purchase is always a difficult and very important decision.  You need to know how much you can afford each month and translate that into the amount you can afford to take out on your new mortgage.  When you start house hunting with that budget in mind, you may find to your dismay that you are not seeing many homes in the price range you have set that match your needs.

There are three choices you have to make in this situation.  The first is to wait , keep looking, and hope the house you want comes up on the market in your price range.  The second is to compromise and buy a house that is affordable but not really what you want.  The final choice is to look at raising your budget. The best advice is not to rush into making a hasty decision.  Figure out what your current financial situation is and put a cushion in place when calculating your figures in case your circumstances change in the future.  If you are considering raising your maximum purchase price then calculate what difference it will make in your actual monthly payment.  In some cases the difference may not be as difficult to handle as you might think.  Using a mortgage calculator you can easily figure out what it would cost you per month to increase your budget figure by say €20,0000.  Sometimes even a small raise in your maximum price can put you into a whole new class of available homes.

Therefore the decision you have to make is if you are you willing to consider making some personal budget cutbacks such as on entertainment to enable you to have the house of your dreams ?  How important is it to you to get everything on your wish list or are you willing to compromise on something ?  If having the right house is the most  important thing to you then you may be prepared to stretch your finances to achieve your goal.  A little flexibility is always a good idea when you start searching for the right house as sometimes spending a little more will save you later in terms of property value.  It can also save you from having to move again when you decide the compromise to save money was not worth it and you need to move to a larger property or a different area.

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How to remodel your home to Increase Your Selling Price

How to remodel your home to Increase Your Selling Price

So you are ready to sell but you know that there are a few things in your property that require some updating in order to increase your selling price.  Your budget may be limited and you are wondering where and how to spend it.  The good news is that there are some solid answers.  It is generally accepted that there are certain things that can increase your selling price more than others.  Don’t go out spending money until you get advice from the experts on what return you may get from your investment. Whether you are getting ready to sell or simply want to remodel now for the best value when you do sell later these are some things that usually give you a better return on your investment.

The Kitchen

Remodelling the kitchen is one of the most important things you can do in your home especially if the kitchen is dated.  It is often one of the first rooms a potential buyer will see and it should make an impression.  The kitchen is often considered the soul of the home and most people spend a good deal of time there.  Upgrades to countertops, cabinets, and appliances are one of the wisest investments you can make in your home.

The Bathrooms 

Second only to the kitchen, the bathroom is the room in the house where dated fixtures or flooring can cost you a sale.  People want a bathroom that is clean, comfortable, and modern.  Neutral colours are best whether a paint finish or tiling as this is a place of privacy and peace so the less fuss the better.  Spending money on a bathroom remodel will almost always be the best way to spend your money and you will see it in your selling price.

The Front  

Getting people in to look at your house is the first step.  First impressions last so as potential purchasers approach your hall door ensure that that the entrance is appealing and welcoming.  Spending some of your money on the front exterior of the house and the landscaping can be advisable.  Improving the look of the house from the outside means you can bring more people in to look and to buy. 

The Back Garden

People love the idea of having some attractive outside space to entertain friends and family.  Also parents usually emphasise how important it is to have a garden for the little ones to play in.  Money can be well spent on a good tidy up and enhancement of any outside space regardless whether it is grass, decking or another finish.

Remodelling your property now for a better sale price later can be a smart move.  As the sooner you do it the more you will be able to enjoy it before it is time to sell and move on.  If well thought out and done correctly to a quality finish you can definitely make additional profit.

To learn more click here

Setting up a home office

When purchasing it is good idea to consider if this property will suit if you should decide to set up an office from home in the future.

More and more people are starting to work from home.  Not only the self-employed but also a lot of companies are now allowing their staff to operate from their home.  If you are looking for a property be sure to take this into account.   Should you start doing your job at home you will need to be able to set up the right space in your private dwelling.

Consider the location

Working from home can be difficult especially if other people are around during your working hours.  You will need to find a location with as few distractions as possible.  Equally that is why you need to visit the location where you are thinking of buying at different times of the day to establish if the area at certain times is overly busy and potentially noisy

Consider the current style of the property

Does the style of the property meet your demands as it currently is.  If so then this can save you a lot of time effort and money.  However it’s not always possible to achieve your dream and most people have to compromise a little when purchasing a property.  Check out properties which already have additional unused space e.g. outside shed, garage, large attic area with adequate headroom.  Many properties for sale have owners who are currently running their business from the dwelling a typical example of this are all the online companies that have been set up in recent times.  In some cases an outside  shed or garage may have already been converted with this use in mind.  Ideally if this has been done correctly then there will be adequate existing electrical power points and heating.     

Consider the potential

Equally think about the potential to extend or convert in the future to enable you to achieve the additional space that you will need should you choose to work from home.  Once again an outside shed may have offer huge possibilities.  Likewise people nowadays in general prefer to park their car in the driveway instead of going to the bother of using the garage.  There are a lot of garages that are currently only being used for storage.  Of course attics can offer the perfect solution to finding that extra space to work from.  An attic conversion can be done provided the design of the house allows for the head height necessary to make the conversion workable.

Consider how to make the best use of the available space

If you have a whole spare room to yourself and lots of space then you can purchase a full-sized desk in whatever style suits you.  However if space is restricted be sure to test out a desk to see how it fits for you before you commit to purchase.  Measure your room in advance and allocate how much can be put in the space you have.  No doubt you will need workspace for a computer, printer, telephone, filing facility ?  How many drawers do you need?  Even with a wireless internet connection in your home wires can get in the way.  Use zip ties to keep them clean and organized and label each with what it goes to so that if things ever get unplugged you can get it all hooked up again quickly. A small rolling cart is great for printers or accessories and can be rolled out of the way when not in use.

Your home office can be very comfortable and successful if you pay attention to the details.  Ideally keep the workspace away from things like the television or any place where kids might be playing, as these can obviously be a distraction when you're trying to work. Look for a place near a window for natural light and make sure you will be able to make the space comfortable for your use without a lot of expense.  The perfect work space can be created no matter how much room you have to work with. 

To learn more click here

Looking At A House Objectively: What Matters And What Should Not

Everyone heads out to look at potential homes with a list of the things they want in a house, and a list of the things they definitely do not want.  In addition to that wish list, there are also some other things you will notice about the homes you visit that may strike you as potential problems.

When looking at homes, it is important to know what things are deal breakers and what things are minor issues that you can deal with easily.  Turning down a dream home because of something that can be easily fixed seems like a silly thing to do, but it happens surprisingly often.

Cosmetic Issues

When you walk into a home which has outdated wallpaper or paint colours you wouldn't dream of using, it turns you off immediately.  While that first reaction is normal, it is important to take a moment, step back from that instinct and think about it objectively.  Painting is not that difficult or expensive, so try to imagine how the home would look with a different colour palette, one that is more your style. You might wish to redecorate to suit your taste anyway, so don’t let those details cloud your judgement.

Being able to recognise which issues are merely cosmetic and can be easily fixed is very important to finding a house you will love. Be prepared to visualise the home as you could make it perfect with a few cosmetic changes.  It will open you up to the different possibilities and might allow you to consider homes that aren't perfect the way they are now, but could be just right for you with a little elbow grease and a touch of paint.

Major Repairs

In some cases the major repairs that a house needs might be obvious.  Sometimes they might only be uncovered during a home inspection.  Either way, you will need to give consideration to whether or not you are willing to deal with the problem.

If the home needs expensive repairs, you can either try to get the vendor to do the repairs or accept that you will need to do them yourself.  In many cases, the vendor will not be willing to take on major repair work, but they may reduce the asking price accordingly.  Still, this might be a deal breaker if you are looking for a home in turnkey condition.

Knowing The Difference

A house inspection is the best way to uncover all of the issues, both minor and major, that a house might have.  When you review the inspection, look for things that can be dealt with easily as well as those that can't.  The amount of work you are willing to do will determine what problems you can personally live with.

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Ten Items That Are Most Likely To Be Left Behind During A Move

When the moving day arrives, there's nothing quite like the nagging feeling that you are forgetting something.  But, don't let the moving blues get you down because there are a few tricks that you can use to make sure that you don't leave anything behind.

Most often the last things that you use are likely to be the ones that are forgotten, so make sure to do a final check through the house before leaving. Before you start packing for your move, make a checklist of the items you need to remember to pack.  If all else fails, use the following checklist to help you retrieve ten items, that are most likely to be left behind during a move. 

1.    Lawn Mower.  Although that is not a small item that's easy to miss, it is easy to forget your lawn mower because it's likely to be stored away in a shed or another location outside the house 

2.    Medicine.  When people go on vacation, their medicine is one of the most commonly forgotten items.  Therefore, it just stands to reason that it may also be easily forgotten during a move. They are easily overlooked, because most medications are kept in a medicine cabinet.

3.    Tools.  We all use tools for simple fix-it projects, but we rarely think to pack them.  Tools are important but, because they are not something that's used every day, they are easy to miss when packing for a move. .

4.   Flashlight.  When the electricity is out or you find yourself outside after dark, these handy gadgets are a necessity.  Moving day, however, often finds families in the dark when it comes to realising they have forgotten their trusty flashlight.

5.    Bathroom Plunger.  It's not a glamorous essential, but it is a necessary one nonetheless.  A plunger is the easiest item to forget on moving day.

6.     Coffee Maker.  If you or someone in your family is a lover of caffeine, your coffee maker is a kitchen essential.  It's likely to be one of the last things that you will use before leaving the home, so it's also likely to be forgotten.

7.   Toilet Paper.  Speaking of one of the last things that you will use before you leave the home, toilet paper will be one of them.  Pack it or buy it when you get there but, either way, this is one kind of paper that you can't afford to forget.

8.   Car Keys.  Whilst taking your belongings to your new home, it's extremely easy to forget your spare set of car keys.  Do yourself a favour and make a note to take them along.

9.     Safes.  Nowadays many families have these, but alot forget them during a move.  Although most safes are purchased to store important papers, such as title deeds, and other essentials, they can be overlooked as they are usually located in an inconspicuous place.

10.     Bills.  Believe it or not - bills are easy to forget.  Most people think about the obvious items that they can see, but it's so easy to accidentally mix some new bills with the old ones and simply discard them.  As we all know this can cause serious problems in the future.

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Planning to buy a house? Here's how to get the cheapest mortgage

This article originally appeared in the Irish Independent.

In an expected move, AIB will, for the fourth time in 18 months, drop its variable mortgage rate from July 1. Curiously, sister banks EBS and Haven haven't followed suit. 

What are the criteria, and how hard is it to get that loan?

However, KBC, ever aggressive, was quickly out of the traps last week with its own offer, undercutting its rival, but only for new customers - existing ones get new fixed rates.

All have incentives and offers to get customers in the door, from paying your legal fees to discount insurance.

What it all means is that banks want new business. They see cranes are sprouting up (albeit not in great numbers), and rising prices put property front and centre. But don't be fooled. Irish customers still pay almost twice the interest rate on mortgages as other Europeans.

The banks are borrowing the money for free, and passing it along at 3.3 to 4.5pc, trousering the profit. The average mortgage interest rate in Spain, for instance, is 1.68pc.

This week, I'm looking at the different types of mortgages on offer, from the first time buyer to those unfortunate enough to be in negative equity. What are the criteria, and how hard is it to get that loan?

General Tips

Know your Loan To Value (LTV). This is the difference between the value of your house (not always easy to determine) and the mortgage on it. A house worth €300,000 with a mortgage of €230,000 has an LTV of 76pc. The lower this figure, the better interest rate you'll get. Banks may charge for a valuation.

You'll be asked to prove earnings and provide bank statements for at least six months. Preparing these to look as attractive as possible is vital. Don't tip into overdraft; use your debit card and show a clear pathway for outgoings.

Using a mortgage broker will cost around €500, but it is money well spent given such a big financial undertaking. They'll do all the paperwork and know the best banks to do deals with.

Your deposit needs to be clearly shown. Banks don't like other loans providing it, or parents. They like to see clear, long-term savings.

Consider variable and fixed rates. The ECB shows no sign of increasing interest rates, and banks build this into fixed offers, preferring to shore up customers for one, three or five years. They are attractive, but you are tying into a contract.

First-Time Buyer

FTBs only need to find a 10pc deposit up to a house value of €220,000. This is very difficult in Dublin, and 20pc over this figure is needed. For the average house price of €349,000, that means coming up with €46,200 - a significant amount. The Central Bank has been asked to look at this, but is standing firm. It is the main reason house prices in commuter counties are on the rise again - 70pc of starter homes outside Dublin are sold for under €220,000.

Trader-Upper

Moving up requires a deposit or equity of 20pc. So, getting your LTV is vital before approaching your bank. Trading up is an ideal time to consider switching bank - many offer incentives, such as Bank of Ireland's 2pc cash back offer (which PTSB also has). The former has higher interest rates, however. AIB offers free current account banking for switchers while KBC and Ulster offer money towards legal fees.

Negative Equity

Loans are possible if your LTV is over 100pc. However, they are difficult to secure. If you are in a small apartment with a growing family but your mortgage is higher than the property's value, it is possible to get a bigger one, but the requirements are quite stringent; however, you only need a 10pc deposit to secure one.

Here's how they work:

Current house value, €180,000. Current mortgage, €245,000. Negative equity, €65,000 (or 136pc).
You find a new house priced at €350,000, putting up a 10pc deposit (€35,000) and making your new mortgage €315,000, plus the carried negative equity of €65,000. This brings the total loan to €380,000, making the new LTV ratio just 109pc.

Most banks limit the overall LTV (see table) and possibly the mortgage term and amount too. If you are coming off a tracker mortgage they may or may not let you keep it, sometimes with added interest, so cost the new repayments fully. All other requirements are the same.

The table shows current interest rates for new business, based on a €200,000 mortgage over 30 years with an 80pc LTV, along with negative equity mortgages.

Independent: Planning to buy a house? Here's how to get the cheapest mortgage

How Big A Back Garden Do You Need?

You probably have spent a good deal of time considering how much space you need inside your home, but what about how much space you need on the outside of it?  House hunting with an idea of the square footage you are seeking is a good idea, but in addition to that you should have an idea of how much space you will need around your new home as well.

Buying a home with a large back garden can be costly, especially in sought after areas where this may be considered a major selling point.  But if your back garden is really important to you, it might be worth the extra expense.  Consider how often you use your back garden or decking and then decide how large you need your outdoor space to be.

How You Use Your Additional Outside Space

If you don't use your outdoor space much beyond sitting on the patio and enjoying the weather, you probably don't need a huge garden or deck.  Granted, the feeling of space and privacy is nice, but if it makes your dream home unaffordable, is it really worth it?

On the other hand, if you have children or pets, you may need that extra space.  With young kids, you will want to have a good place for them to play outside.  If you have big dogs, you will need the room for them to run around and get exercise.  A good sized garden deck or yard is a requirement for most families with children and pets.

If you like to host a lot of barbeques, you will want enough space for everyone to spread out with a decent sized deck or patio.  In this case the size of the entertainment area is more important than the green space.

Consider The Work Involved

The bigger your back garden, deck, or yard, the more work you will have to do in order to keep it in good shape.  A large lawn means more hours spent cutting the grass, and large gardens mean more time spent weeding and planting.  If you can't do the work yourself because you are too busy, you will probably have to consider hiring someone to maintain it for you.  This can be expensive, especially for if its really large.

Everyone thinks they want a nice garden, but it is important to be realistic about what you need and weigh it against the work and cost involved.

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The Best Way To Find Your Perfect Home

As the old saying goes, it’s all about location, location, location.  But, there is a lot more to it than just plain geography when it comes to finding your perfect home.  There are a lot of things to consider during the search because, for most, a home is the most significant purchase they will ever make.

Choose A Good Area

When searching for your perfect home, the obvious place to start is with the selection of a location.  If you have children, you may want to choose a home that is close to good schools and is also located close to amenities.  Transport links are very important so in Dublin for instance easy access to the M50, Dart, Luas and Arrow are advisable.  Many people also look for a home that offers a short commute to and from work.  If you are shopping within a specific price range, you can also narrow the choices by finding an area that offers the best value for your money.

 Decide Your Priorities

The perfect home for you is one that has all of the elements that you want. Whether it's a sunny back garden, a large kitchen, an extra bedroom, attic conversion etc , choosing the style of home that you want is an important first step in finding the perfect place to hang your hat.  You may also want to consider whether you prefer a single-level or two-story home.  Many home buyers also factor in the potential to extend in the future as a vital factor in their selection.

Get Mortgage Approval In Principle 

Now that you know what you want and where you want it, it's important to find out how much you can afford.  Your lender will request specific information relating to your income and expenditures and will offer a possible price range for you to keep in mind.  After an initial conversation with your broker, bank, or building society you will have as a good indication of what budget you have to spend.

Enjoy The Process

In conclusion, you should know that the search for your perfect home is a journey.  It may be either long or short and with or without some bumps along the way, but the greatest satisfaction will be at the journey's end and your future's beginning. 

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Central Bank says mortgage lending rules are here to stay

This article originally appeared in The Irish Times.

Review of regulations will not lead to their abolition, says chief econimist

Central Bank chief economist Gabriel Fagan. Photograph: Alan Betson/The Irish Times.

The Central Bank has again robustly defended its restrictive mortgage lending rules, saying they are “permanent”.

At the presentation on Friday of the bank’s quarterly accounts, chief economist Gabriel Fagan said the bank was working on a review of the rules, which will be published in November, but said this review would not lead to their abolition.

Mr Fagan warned against people equating a review with a change in the rules.

“We shouldn’t think of a change taking place,” he said, adding that the rules may not be changed at all or may be tightened.

Introduced in February 2015, the rules limit the amount home buyers can borrow, typically to 3½ times their gross income up to a limit of 80 per cent of the purchase price of the property.

Last month, the Central Bank issued a robust defence of the home loan caps, saying commercial banks and mortgage brokers were unable on their own to uphold “prudent” credit standards.

However, the rules continue to come under increasing criticism.

Addressing the wider economic recovery, the Central Bank revised its growth forecast upwards for the Irish economy for 2016 and is now predicting growth of 5.1 per cent, up from 4.8 per cent previously, “on the back of exceptionally strong rates of growth in domestic demand”.

However, it warned that Ireland’s economic recovery was “not complete” as it forecast “marginally lower growth” for 2017.

Overall the outlook for the economy remained “broadly favourable”, it said.

It is forecasting gross domestic product (GDP) growth of 5.1 per cent for 2016, up by 0.3 per cent from its previous forecast, and 4.2 per cent for 2017, down from 4.4 per cent previously, as it said domestic demand was now firmly the main driver of expansion.

While the economic outlook may be relatively favourable, the Central Bank also noted risks, including levels of public and private sector debt, which remain high.

As such, there is a “strong case for precautionary behaviour and prudence”, Mr Fagan said.

This would allow the next government to build up a buffer should adverse circumstances arise.

Wage growth

Wage growth was also cited by the Central Bank as a potential risk, as it warned that while there may be some recovery in wage growth, “it is important that that this process does not lead to overshooting”.

Political uncertainty at home may also be an issue.

Five weeks after the general election and with no sight of a new government, Mr Fagan said the uncertainty had so far not had a negative effect.

However, he warned that “protracted uncertainty could lead to an adverse impact”.

On the external front, the regulator said emerging market concerns as well as broader geopolitical factors were potential issues, as was the forthcoming Brexit referendum which “creates uncertainty and is a downside risk factor”.

Pointing to household debt figures, the Central Bank said gross new lending increased in 2015 with households drawing down €4.4 billion in new mortgage loans.

However, the figures also revealed that “a significant degree of deleveraging” was still under way in Irish households as they continued to reduce overall debt levels.

This ongoing decline might suggest that the economic recovery had, to date, been somewhat “creditless”, the Central Bank said.

Central Bank says mortgage lending rules are here to stay

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How To Solve The First Time Buyer Mortgage Maze !

For first time buyers the mortgage process can seem complex and confusing.  On top of everything else you need to figure out interest rates, loan terms, fixed versus adjustable rate mortgages and much more.  In order to simplify and streamline the process it is best to do some research before you go and apply for a mortgage. Recommendations and endorsements in any sphere of life are always a good way to start so do your homework. There are a vast amount of financial institutions offering a vast array of mortgage products so contrast and compare.

Be In The Know 

You will need to have some cash in the bank before you can buy a home and many first time home buyers are surprised at the amount.  There are other financial factors to be taken into account not just your savings record.  Of course proof of your ability to save and thus in the future repay your mortgage is important but this only one component. Check your credit history i.e. repayments of previous loans to make sure that there are no issues from the past.  Financial institutions will take into account your current earnings but also into consideration what effect any change in your personal circumstances may have on your repayment capacity.

Plan For Out Of Pocket Expenses 

Once you have selected your chosen property and successfully gone sale agreed other additional costs will include a solicitor to handle the conveyancing on your behalf.  In most cases a structural survey will have to be carried out on the property by a Quantity Surveyor or Architect which you will have to pay for.  An independent valuation on behalf of the lending institution you are getting your mortgage through is obligatory and the fee involved has to be paid by you too.

So don’t forget the additional costs that can sometimes be overlooked and then cause a lot of stress. Moving of furniture budgeted in advance will make your closing date when you will finally get the keys of your new home a day to enjoy.  To avoid  stress plan well in advance and have the additional kitty close at hand so that your home purchase will be one of the best days of your life.

Enjoy The Experience

When it comes to buying your first home it can be a very exciting as well as a nerve wrecking time. By doing your research and preparing yourself for the process you can ensure it goes more smoothly and ensure you do not run into any nasty surprises.  Once you get that mortgage approval in principle letter from your chosen lender you can then start the fun part of searching for your first home!

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How to decide if now is the right time to buy a home?

Buying A Home Versus Renting A Home

When it comes to a home you have two options whether to buy or rent.  What is right for one person may not be right for another, which is why it's important to know which is the best option for your individual situation. 

Why Some People Choose To Rent

There are various reasons why someone may either choose or be forced to rent.  Their income may be unpredictable, or they may have to relocate for work on a regular basis. They may be unable to save enough money for the down payment required to buy a home.

Maintenance Matters

Another consideration when choosing whether to rent or buy is maintenance and repair issues.  When you rent, the property owner is responsible for repairs and it may not always be obvious that these issues can be costly.

How To Know When It's Time To Buy

If you have steady employment and income, a good credit history and proof of adequate savings it may be time to consider buying a home instead of renting.  In many cases, the cost of rent can exceed that of a typical mortgage payment. When thinking about buying, job stability is a big factor you may want to consider before making the decision to make a purchase.

Home Buyer's Checklist 

In addition to any current monthly outgoings can you afford a monthly mortgage payment as well as property taxes and insurance?

Do you have the necessary time at present to devote to shopping for a home and comparing interest rates from various lenders to get the best mortgage for you?

The Final Decision

The final decision to buy or rent is a very personal one that can only be determined after a careful evaluation of your situation.  An estate agent can show you the perfect home and a lender can tell you whether or not you can afford it, but it's up to you to make the choice as to whether or not you are ready to make that move. 

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Why Open House Viewings Are So Popular With Purchasers

An open house can be a great tool for showing your house and getting it sale agreed.  On the other hand, it may take work to prepare for one but the benefits by far outweigh the effort.  It requires that you be out of your house for only a short while usually an hour at most.  It also guarantees you will get a lot of people in the door some serious some maybe not, however those attending have shown interest in your property so by no means is it a wasted effort. 

So how often should you hold an open house when your home is on the market?

The frequency depends on a few factors as an open house will bring in people who otherwise might not have made an appointment to see your home. These are people who may not have known the house was of interest to them until they saw it in person.  Home hunters often spend a day at weekends going to various open houses, and might add a home to their list that wouldn't otherwise be of interest. When you leave enough time in between each open house, you allow for new buyers to come into the market and bring a new crop of people each time.

Is The Effort Worth The Benefit?

Getting your home ready prior to an open house viewing takes some effort.  You will need to make sure everything is clean and all the clutter is hidden away.  Even if you are keeping your home show ready as much as possible it will require some extra work. In the initial stages an open house is a good strategy to promote your property and generate immediate interest.  The longer your house is on the market it may be a combination of single viewings and open house viewings at weekends.  Presentation is key so any time you spend will assist you in getting the best possible price.

Which Day To Hold An Open House Viewing On?

Ensure that the agent you appoint is prepared to do open house viewings at weekends and ideally confirm that they will do Sundays as well.  So many people are working long hours nowadays that in a lot of cases the only day that most couples have off work to view together is a Sunday.  Also request that viewings are not just done early morning but also in the afternoons which is often more convenient for people with children.

How Important Are Single Viewings?

If you have a lot of prospective buyers making appointments to see the house you may not need to hold single viewings that often.  If you aren't getting a lot of requests to view then any enquiries submitted have to be taken very seriously.  Arranging an appointment to view from the interested party is imperative so a single viewing may be the best option. The longer you have been on the market the more useful a single viewing may be especially as a second viewing by someone who has already seen the property at an open house viewing.

Of course, your estate agent will help you to select the right timing and frequency of your open houses based on the interest in your property and the market in your area.

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The Benefits Of Buying Your Own Home

The decision to purchase a home is exciting and a major investment for your future.  Because there is only so much of it to go around, real estate is the top choice for many investors and the desire for most families.

One of the most profitable markets in real estate is rentals, which means that many families are paying to live in a home that isn't their own.  In some cases, renting a home is necessary.  For all others, the money that would be spent on rent could instead be used to pay a mortgage.  In fact, monthly rent payments often exceed that of a typical mortgage payment.  One of the greatest benefits of home ownership is putting money into something that you can call your own and knowing that the monthly payments are going toward your home's equity.  Therefore home ownership is an investment in your future.

Speaking of equity, many properties experience a growth in value as more development moves into the area or the economy strengthens through an increase in job opportunities.  If this happens, normally home values increase and owners can benefit in the long term.  On the other hand when you purchase a new car, it depreciates the moment that you sit into it and drive.  When you buy a home, however, it has the potential to appreciate over the years.  There are few things in life that can offer you a return above and beyond your original purchase price, but in a normal economy over time a home can do this.

When you own a home, you will enjoy the freedom of decorating and making any changes that you choose without needing the permission of a landlord or property owner.  In addition, in some instances you may even be able to use your home's equity to finance some needed improvements and/or repairs.  In some cases, these changes may even increase the value of your home.  An upgraded kitchen or bathroom, hardwood flooring or an additional room are examples of changes that could result in added value.

Another advantage of home ownership is some tax benefits which may be available.  The interest paid on a home mortgages as well as some other related costs may be tax deductible. 

In addition to providing yourself and your family with a feeling of stability and permanence, home ownership can also help strengthen your credit profile through timely mortgage payments and a steady financial history. 

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Are you considering Buying A Fixer-Upper ?

Always dreamed of renovating a home exactly to your specifications, or have you found an older house that is structurally sound but needs a lot of work inside?  Perhaps the price is right and you can't resist what you can get for your money.  Whatever the reason, buying a fixer-upper can be both an exciting and rewarding purchase or a financial and time consuming disaster, depending on whether you are prepared for what you have gotten yourself into.  So what should you know before buying a home that requires a little or a lot of tender loving care?

The Benefits

The benefits of purchasing a fixer-upper are obvious.  The price is usually right, and if the seller wants a quick sale you may be able to negotiate a really great price.  Also, if you intend to flip the home after the renovations, the profit for the money and time you have invested may be quite considerable.  The trick to getting these benefits, however, is knowing what type of property to look for, as well as having an accurate idea of the associated costs, and realistic expectations of the time and effort it will take.

What Makes A Great Fixer-Upper?

There are several features that may make for a great fixer-upper.

Location-Buying a home in a desirable neighborhood is always a smart idea, particularly with homes that require a lot of work. Purchasing a house in a sought after area can mean a greater resale value.

Layout -This is especially important if you plan to sell the home after the renovations are finished.  Selecting a home that will appeal to the greatest number of buyers will get you the best price.  Also, choosing a home with a good layout may save you a considerable amount on the actual renovation costs because you are less likely to need extensive work to be done.

Condition-Ultimately the most important consideration is the actual condition of the home. Choosing a fixer-upper with only cosmetic problems such as damaged flooring or old fixtures, and in need of only a new paint job, can often have the greatest profit margin and require much less money and time.

When purchasing a home that needs work done it is recommended to get some advice from a property expert and get estimates of the cost of any work that is required before making your offer as this will make all the difference with your decision.

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