Tag Archives: property

Lose Your Cable TV If You Want a Mortgage Write-Down

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The issue of mortgage write-downs or ‘debt forgiveness’ has been a very thorny one in Ireland ever since the Irish banks effectively collapsed and were taken into state ownership. Thousands of home-owners lost their jobs at about the same time as the value of their property plunged. They found themselves in negative equity, preventing them from selling their now-devalued property and trapping them in apartment blocks and rural housing estates in a vicious circle that is hard to escape.

The realization that a certain level of mortgage write-downs would have to be granted was greeted with a mixture of despair by those who actually managed somehow to pay their mortgage and with an opportunistic ‘nod and a wink’ by those who are trying to ‘game the system’. There is anecdotal evidence that a certain number of home-owners are deliberately not paying their mortgage in anticipation of a deal being struck in the future. This is preventing write-downs being offered to the most deserving of cases, stalling the property market, trapping people in homes they cannot afford.

It is estimated that as many as 100,000 Irish mortgages are now in arrears of at least three months. It is inevitable that deals will have to be done with some if not many of these cases. The banks are unsurprisingly being very cagey. Where home-owners in arrears present themselves to the bank they are being offered longer terms, mortgage holidays, interest-only payments, split mortgages, etc., in an effort to give them some breathing space. For some, even these measures will not be enough.

The new Personal Insolvency Service has laid out a number of concessions that they expect from those desperate for a deal including:

* getting rid of a second car and even trading down to a lesser model of car
* an end to taking foreign holidays
* removal of certain Cable TV services including sports and movies packages
* removal of children from private schools
* ending of private health insurance
* any other obvious ‘unnecessary’ expense

The Personal Insolvency Service is part of the Government’s overhaul of the outdated bankruptcy laws in Ireland. Irish banks are expected to use the new rules and restrictions laid out by the Service in dealing with people seeking mortgage write-downs.

It is likely that these new measures may be tested in the Courts. The spectre of desperate families choosing between private education for their children and private health insurance over keeping their family in their home is likely to be loom large in the national consciousness and soon.

It is a battle that will likely get ever more bitter as the stark reality of a bank-imposed ‘austerity lifestyle’ hits home.

by Michael Green
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Unfinished ‘Ghost Estates’ a Huge Problem in Ireland

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The property boom that gripped Ireland during the 1990′s and the early part of the new century had a dreadful far-reaching effect when property prices crashed. The leading banks in Ireland had to go cap-in-hand to the Government for a bail-out which in turn bankrupted the economy and resulted in extensive loans being required from the EU/IMF ECB troika.

On a wider perspective the property crash decimated the economy but also caused a lot of problems on a micro level too. Many Irish couples bought starter apartments in the hope that they could move to a bigger house when their family grew. Now stuck in negative equity there are thousands of families who simply cannot afford to move from their unsuitable apartments and are trapped, waiting on the property market to improve before they can sell up and move on.

Worse again is the situation of those families who bought houses and apartments in building schemes and housing estates only for the builder to go bust half way through the build. Now they are surrounded by dozens of unfinished properties and are living in virtual building sites which attract vandalism and anti-social behaviour.

A new report from the Irish Government Department of the Environment has revealed that there are now 1770 unfinished housing developments dotted around the country. Of these 1100 are in a very bad state and are even commercially unviable. While the larger cities have their share of such property developments it is in the midlands and border Counties where the problem is even more obvious. Once quaint towns and villages are now blighted by the remnants of the ‘Celtic Tiger’ era of building mania.

It is clear that several of the 1770 housing schemes will have to be completely demolished and returned to a ‘green field’ state, perhaps providing some employment for the now unemployed construction staff who helped to build them in the first place.

Internet usage in Ireland to boost Irish economy by up to 6 Billion Euro

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A report commissioned by media group UPC has revealed that as much as 6 Billion Euro could be contributed to the Irish economy by 2016, thanks to an increase in ecommerce activity. 2012 is expected to see spending of 3.7 Billion Euro, rising to 5.7 Billion Euro by 2016. This figure would constitute 7% of all consumer spending in Ireland. The report found that Irish adults who shop online spend an average of 116 Euro monthly. 80% of Irish adults now use the internet regularly, up from 50% in 2007. 45% of Irish consumers have made on online purchase in the last year, up from 36% in 2010 and matching the EU average.

This number compares poorly though with the UK where 71% of consumers made purchases in the previous year. A significant difference between the two markets is that as many as 1 in 5 UK consumers buy their groceries online while in Ireland the figure is 1 in 20. The UK is now the worlds second biggest internet market in terms of sales value and is surely a market that Irish export businesses should be focusing on.

The ‘State of the Net’ publication by the Irish Internet Association has mirrored these findings detailing that there has been an increase of 20% in business marketing budgets being spent on promoting online businesses in Ireland. This compares with an overall 4% decline across other marketing media with newspapers suffering badly. 70% of Irish businesses now have a Facebook presence, 61% are on Twitter while 44% have their own Youtube channel.

It has not all been good news for Irish internet businesses though. The Irish Times newspaper recently sold its ireland.com domain name to Tourism Ireland for 495,000 Euro – quite a return on the 3000 Irish punts they reportedly paid for it in the 1990′s. Sounds great except that the same Irish Times paid 50 Million euro for myhome.ie at the very height of the property hysteria in Ireland, only to see its value plummet when the property market crashed. The Irish Times was one of the first sites in Ireland to offer paid content with subscribers paying an annual fee to access content not available to unregistered users.

As a result of the deal the 15,000 ireland.com customers and email account holders have been unceremoniously ditched. Lets hope they backed up their email.