Central Bank to limit amount banks lend for home purchase

El_Dangeroso

Sala wrote: »

I have noticed this as well. I would have thought they'd have to pay for this though. Do price drops really influence people that much

Price drops say 'No interest' in a property which would make people more likely to make low-ball offers.

MarkAnthony

Barely Hedged wrote: »

What safeguards and what have i quoted out of context? I think, yet again, youre confusing me with somebody else

You misread even that - go over my posts.

gaius c wrote: »

You seem to be under the misapprehension that giving people more credit to people without capital, helps them compete with those who have capital/equity.

Of course it does. In limited circumstances where it makes the person richer in the long term (set aside rising property markets, even in a falling property market it makes people richer). You keep waffling on about short term commitments. Shelter is not a short term commitment. Generally most of us like to have a roof over our heads 24/7. You seem to be confusing these proposals with getting someone on to the property ladder that eventually wants to live in Clontarf. It's a case of taking people out of the lower end rental pool as it cheaper for them to buy.

EDIT taking your point on compound interest - that's actually the issue in fairness - but not in the way you've described. The Dublin rental market is not independent of the buyers market because of the prevalence of BTLs (with the landlords getting them by design or by accident). Thus renting is much more expensive (even taking in maintenance) because interest has to be paid and the LL has to (ideally) make a profit. The tax man takes his cut also where as he gives back to someone with a mortgage.

Sala

El_Dangeroso wrote: »

Price drops say 'No interest' in a property which would make people more likely to make low-ball offers.

I have notice a few that drop and then go sale agreed quite quickly. I would have thought a drop from a silly asking is indicative that are willing to move, and therefore should encourage viewer who are hoping to put in a below asking offer

MarkAnthony

El_Dangeroso wrote: »

Price drops say 'No interest' in a property which would make people more likely to make low-ball offers.

Sala wrote: »

I have notice a few that drop and then go sale agreed quite quickly. I would have thought a drop from a silly asking is indicative that are willing to move, and therefore should encourage viewer who are hoping to put in a below asking offer

I think you're both right and it's simply down to the client/EA.

It always makes me laugh when private parties are selling things, everyone is different and some people get really angry because of low offers. 95% of people low balling are time wasters but there are always that one or two that are testing the waters and might be closed.

Barely Hedged

MarkAnthony wrote: »

You misread even that - go over my posts.



Of course it does. In limited circumstances where it makes the person richer in the long term (set aside rising property markets, even in a falling property market it makes people richer). You keep waffling on about short term commitments. Shelter is not a short term commitment. Generally most of us like to have a roof over our heads 24/7. You seem to be confusing these proposals with getting someone on to the property ladder that eventually wants to live in Clontarf. It's a case of taking people out of the lower end rental pool as it cheaper for them to buy.

Sorry if you can't see it guys but as I said at the very beginning many can't see/think outside the box which is why we'll keep doing the same thing over and over again.

I didnt misread anything. Do you know who, what or where youre posting too? You suggested no safeguards to the rental crisis, which i wasnt even talking about. Youre running yourself around in circles.

Your posts are all airy fairy nonsense. Give people who want to settle for a long time 100% mortgages. How do you define that and how do we know somebody will be living there? So much abuse of that is possible.

Give people with a good credit history but no savings 100% mortgages? Is saving cash and having a buffer in your bank account not considered the definition of good creditworthiness?

Let people who buy in an area thats relatively cheap with full mortgages. Define relative? You think then that independent valuations will be a safe guard. Valuations are based on previously sold prices and price by sq m. In your example shift 100% mortgages to Coolock. People start chasing and pushing up selling prices with 100% levergaed debt. The valuations are then based on these inflated selling prices. Wheres your safe guard then? Cap the sq m price of a house in Coolock? I couldnt begin to tell you how many issues would be associated with it.

You keep saying that we agree to disagree and that "im not thinking outside of the box". The fact is you have ignored all the facts i have presented, youve no answer for them and your ideas are not even thought beyond the first issue that they might encounter

MarkAnthony

Barely Hedged wrote: »

I didnt misread anything. Do you know who, what or where youre posting too? You suggested no safeguards to the rental crisis, which i wasnt even talking about. Youre running yourself around in circles.

Your posts are all airy fairy nonsense. Give people who want to settle for a long time 100% mortgages. How do you define that and how do we know somebody will be living there? So much abuse of that is possible.

Give people with a good credit history but no savings 100% mortgages? Is saving cash and having a buffer in your bank account not considered the definition of good creditworthiness?

Let people who buy in an area thats relatively cheap with full mortgages. Define relative? You think then that independent valuations will be a safe guard. Valuations are based on previously sold prices and price by sq m. In your example shift 100% mortgages to Coolock. People start chasing and pushing up selling prices with 100% levergaed debt. The valuations are then based on these inflated selling prices. Wheres your safe guard then? Cap the sq m price of a house in Coolock? I couldnt begin to tell you how many issues would be associated with it.

You keep saying that we agree to disagree and that "im not thinking outside of the box". The fact is you have ignored all the facts i have presented, youve no answer for them and your ideas are not even thought beyond the first issue that they might encounter

I see now you've managed to have a read and put together some of the posts. I'm sorry you feel you're running round in circles, I've been clear from the outset on how this would work.

As for it being Airy Fairy non-sense you've suggested zero solutions yourself, misread and misinterpreted things and not been able to follow the thread. As I say I think we've both made up our minds, carry on.

Barely Hedged

MarkAnthony wrote: »

I see now you've managed to have a read and put together some of the posts. I'm sorry you feel you're running round in circles, I've been clear from the outset on how this would work.

As for it being Airy Fairy non-sense you've suggested zero solutions yourself, misread and misinterpreted things and not been able to follow the thread. As I say I think we've both made up our minds, carry on.

Ive posted the facts of the situation, which are historically proven, and youve chosen to ignore and instead to deflect by saying that im misinterpreting your points or taking you out of context. Ive pretty much managed to reproduce all your points in the last post and now im running around in circles because i dont understand??? Tell me what i dont understand about reproducing your points and then questioning them?

In summary, youre genuinely shocked the government arent enacting your proposals or why theyre not even being talked about. The simple reason is theyre so ill thought out as regards long terms consequences and such utter rubbish that youd be laughed at in a public forum

MarkAnthony

Barely Hedged wrote: »

Ive posted the facts of the situation, which are historically proven, and youve chosen to ignore and instead to deflect by saying that im misinterpreting your points or taking you out of context. Ive pretty much managed to reproduce all your points in the last post and now im running around in circles because i dont understand??? Tell me what i dont understand about reproducing your points and then questioning them?

In summary, youre genuinely shocked the government arent enacting your proposals or why theyre not even being talked about. The simple reason is theyre so ill thought out as regards long terms consequences and such utter rubbish that youd be laughed at in a public forum

Ah now let's be careful about accusations of deflections, it's pretty clear you've been unable to engage with the issues until your recent posts. And then we get into you'd be laughed at etc. etc. Ah the standard Irish middle class attitude again. Anyway putting all that aside.

What are you not understanding about this being a limited solution, in limited circumstances given the harshness of the new rules? Let me know specifically and I'll try and break it down for you. If you have a specific concern and would like to show me the error of my logic I'd be delighted to hear that also.

First issue I have and maybe you could help me is if it's vastly cheaper to buy than it is to rent, why is assisting people to buy a bad thing, given the right safeguards being put in place?

Thanks in advance.

Barely Hedged

MarkAnthony wrote: »

Ah now let's be careful about accusations of deflections, it's pretty clear you've been unable to engage with the issues until your recent posts. And then we get into you'd be laughed at etc. etc. Ah the standard Irish middle class attitude again. Anyway putting all that aside.

What are you not understanding about this being a limited solution, in limited circumstances given the harshness of the new rules? Let me know specifically and I'll try and break it down for you. If you have a specific concern and would like to show me the error of my logic I'd be delighted to hear that also.

First issue I have and maybe you could help me is if it's vastly cheaper to buy than it is to rent, why is assisting people to buy a bad thing, given the right safeguards being put in place?

Thanks in advance.

You think im middle class? Why do you think that? As you brought it up for no reason, no "im not putting it aside".

The error of your logic is your solutions. Respond to the questions i have asked in my previous post. You still havnt done that.

"Vastly cheaper". Again, more airy fairy nonsense. What is the definition of "vastly cheaper". I have questioned the previous safeguards you have suggested in my previous post. Refer to that if im incorrect

highgiant1985

Have the Central Bank given any indication / time frame for which they will publish a response to the consultation period?

MarkAnthony

Barely Hedged wrote: »

You think im middle class? Why do you think that? As you brought it up for no reason, no "im not putting it aside".

I didn't say you were middle class - I said you had a closed minded Irish middle class attitude.

Barely Hedged wrote: »

The error of your logic is your solutions. Respond to the questions i have asked in my previous post. You still havnt done that.

Please restate them as some of them were made before you had read through what I had written.

Barely Hedged wrote: »

"Vastly cheaper". Again, more airy fairy nonsense. What is the definition of "vastly cheaper". I have questioned the previous safeguards you have suggested in my previous post. Refer to that if im incorrect

You either want a conversation or you don't. So far you just said, look it is X therefore X is correct. I disagree.

EDIT: Might be worth us moving to a separate thread also.

Michael D Not Higgins

MarkA, you know it was cheaper to buy than rent during the bubble too. That doesn't mean it was smart for a low income family to get a 100% mortgage. You've mentioned safeguards, independent valuations, etc. but as has been pointed out to you, this will not help in the long run. It is wide open to abuse.

Another issue of the variance in rent and mortgage costs doesn't take into account property taxes, maintenance and upkeep, insurance and the myriad other costs of owning a home. Next take someone paying X amount on rent and tell them they can have a 100% mortgage. They'll look for a mortgage for X amount. There's no saving to be made except they might trade up in the property they live in, in exchange for huge liabilities and debt.

Barely Hedged

MarkAnthony wrote: »

I didn't say you were middle class - I said you had a closed minded Irish middle class attitude.



Please restate them as some of them were made before you had read through what I had written.



You either want a conversation or you don't. So far you just said, look it is X therefore X is correct. I disagree.

EDIT: Might be worth us moving to a separate thread also.

To infer that i have the attitude is to imply that i am.

Im not restating them. Its about 3 posts above. In the past hour.

Youre putting all these unquantifiable phrases forward like "vastly cheaper" but have nothing to back up your phrases. Yeah, they sound great and people who are renting love to hear them but theyre not actually true. A mortgage is a > 20 year committment and its common in Ireland for 30 year mortgages. Youre saying solve the rental crisis of the past year and a half by ushering mortgages on people for 20-30 years and even go as far as 100% mortgages. Can you not understand how short sighted that is? Added to that how many expenses do landlords incurr that youre leaving out? Boiler breakdown, leaking taps, leaking roof, water charges, property tax

MarkAnthony

Barely Hedged wrote: »

To infer that i have the attitude is to imply that i am.

Im not restating them. Its about 3 posts above. In the past hour.

Youre putting all these unquantifiable phrases forward like "vastly cheaper" but have nothing to back up your phrases. Yeah, they sound great and people who are renting love to hear them but theyre not actually true. A mortgage is a > 20 year committment and its common in Ireland for 30 year mortgages. Youre saying solve the rental crisis of the past year and a half by ushering mortgages on people for 20-30 years and even go as far as 100% mortgages. Can you not understand how short sighted that is? Added to that how many expenses do landlords incurr that youre leaving out? Boiler breakdown, leaking taps, leaking roof, water charges, property tax

Lets (you and I) leave it there, again you've made statements about what I've said that aren't what I have said. You're also covering old ground I've covered off even in your above post and refused to engage with questions I've asked.

Very best of luck to you.

Barely Hedged

MarkAnthony wrote: »

Lets (you and I) leave it there, again you've made statements about what I've said that aren't what I have said. You're also covering old ground I've covered off even in your above post and refused to engage with questions I've asked.

Very best of luck to you.

Fair enough because you never mentioned "vastly cheaper". Im just making it up and running around in circles.

MarkAnthony wrote: »

First issue I have and maybe you could help me is if it's vastly cheaper to buy than it is to rent, why is assisting people to buy a bad thing, given the right safeguards being put in place?

If im middle class, then youre a champagne socialist. You want everything for no effort and you should be facilitated regardless of the outcomes

Barely Hedged

Michael D Not Higgins wrote: »

MarkA, you know it was cheaper to buy than rent during the bubble too. That doesn't mean it was smart for a low income family to get a 100% mortgage. You've mentioned safeguards, independent valuations, etc. but as has been pointed out to you, this will not help in the long run. It is wide open to abuse.

Another issue of the variance in rent and mortgage costs doesn't take into account property taxes, maintenance and upkeep, insurance and the myriad other costs of owning a home. Next take someone paying X amount on rent and tell them they can have a 100% mortgage. They'll look for a mortgage for X amount. There's no saving to be made except they might trade up in the property they live in, in exchange for huge liabilities and debt.

Thought i was going mad for a time there.

I cant understand people like MarkAnthony who put these populist phrases and scenarios forward but when questioned on them deflect everything and run for the hills.

Frustrates the whole process of achieving good, long term solutions that are in the interests of society at large particularly in government with the number of independents that are always at this

El_Dangeroso

highgiant1985 wrote: »

Have the Central Bank given any indication / time frame for which they will publish a response to the consultation period?

I also would like to know if there is an answer to this question.

Can we leave the pros/cons of 100% mortgages to another thread please?

Michael D Not Higgins

El_Dangeroso wrote: »

I also would like to know if there is an answer to this question.

Can we leave the pros/cons of 100% mortgages to another thread please?

The Central Bank's policy is to publish a final paper within 3 months of the close of any consultation period.

Cuddlesworth

Michael D Not Higgins wrote: »

The Central Bank's policy is to publish a final paper within 3 months of the close of any consultation period.

I would hazard a guess and say this will have a shorter timeframe.

MarkAnthony

Michael D Not Higgins wrote: »

MarkA, you know it was cheaper to buy than rent during the bubble too. That doesn't mean it was smart for a low income family to get a 100% mortgage. You've mentioned safeguards, independent valuations, etc. but as has been pointed out to you, this will not help in the long run. It is wide open to abuse.

Another issue of the variance in rent and mortgage costs doesn't take into account property taxes, maintenance and upkeep, insurance and the myriad other costs of owning a home. Next take someone paying X amount on rent and tell them they can have a 100% mortgage. They'll look for a mortgage for X amount. There's no saving to be made except they might trade up in the property they live in, in exchange for huge liabilities and debt.

Indeed it was, indeed it has, but no-one has managed to put concrete reason on why it has to be open to abuse.

That said your point is an interesting one as during the boom scheme were put in place in an attempt to let people get access to purchase even though they didn't make the mainstream lending criteria. I'm simply saying that the same needs to happen too offset the harshness of the new CB rules. The UK have taken a less harsh approach and announced a scheme today (or yesterday) in an effort to deal with their issues. I actually don't disagree with the CB rules but a method of offset needs to be there not some widely available insurance scheme (defeats the purpose) and not the banks having a discretion which will indeed be open to abuse.

I will concede that there is perhaps a better solution, such as the 50/50 scheme that used to be there or rent to buy, what I won't concede and frankly offends common sense is that poorer people should be forced into renting; the thrust of that argument seems to be poor people are poor because they are stupid/lazy/unable to make a long term commitment. That's simply not the case.

@Barely - thanks for pointing this one out but I've no interest in continuing the argument with you, it's descended into petty bickering (on both our parts) please stop trying to continue that by extension, thanks.

As for moving it to another thread, I think alternate schemes is worthy of discussion and on topic but I'll be guided by other people's views on whether this is the right place. I'll say no more about it if no more is said.

highgiant1985

highgiant1985 wrote: »

Have the Central Bank given any indication / time frame for which they will publish a response to the consultation period?

Not to my knowledge and I've been watching/waiting. The only thing I've seen from them lately is this new report which warns that house prices are rising faster than at the height of the bubble.

The debate on the merits of these rules is like an argument over abortion or Roy Keane/Saipan - nobody ever changes their mind and everyone just gets a bit more entrenched in their initial position.

At this stage it's a question of whether the rules will come in and when. Given the tone of today's warning, I'm leaning back towards an expectation that the CB is going to press ahead.

Last week I was beginning to think the lobbying would become too heavy to bear and they'd have to water them down. But given what they've said today about their concerns on rising prices it'll be quite the climbdown if they decide against their initial proposal.

Michael D Not Higgins

MarkAnthony wrote: »

Indeed it was, indeed it has, but no-one has managed to put concrete reason on why it has to be open to abuse.

It's human nature, if we think we can game the system we will.

You mention other schemes during the boom. I'd mention that these served to feed the credit bubble and overburdened some people with debt they couldn't service, all the while feeding into the inflated property prices. That was unsustainable and led to the crash as soon as the financial crash happened.

I wouldn't agree that it's necessarily off topic. We are still discussing the merits of the LTI and LTV limits and the possible effects on the market, including any government initiatives like the mortgage insurance scheme. It's possible your scheme could be made into a workable solution but I'd see it better as a social housing scheme where the government body buys the houses and then rents/mortgages them to the people on the housing lists. At least in that instance there can be some control on the level of borrowings involved.

This article says the CB will 'announce' its new rules in January as it will take several weeks to go through all the submissions.

It was always a very tight timescale. How did they not see that from the start?

MarkAnthony

Michael D Not Higgins wrote: »

It's human nature, if we think we can game the system we will.

You mention other schemes during the boom. I'd mention that these served to feed the credit bubble and overburdened some people with debt they couldn't service, all the while feeding into the inflated property prices. That was unsustainable and led to the crash as soon as the financial crash happened.

I don't necessarily agree but I take your point. I would argue though that these were a drop in the ocean compared to investors getting in. It's clear they're the ones driving it this time.

I'd also submit that it was people who could easily afford 20% deposits being offered silly multiples of salary that was the major issue.

Michael D Not Higgins wrote: »

I wouldn't agree that it's necessarily off topic. We are still discussing the merits of the LTI and LTV limits and the possible effects on the market, including any government initiatives like the mortgage insurance scheme. It's possible your scheme could be made into a workable solution but I'd see it better as a social housing scheme where the government body buys the houses and then rents/mortgages them to the people on the housing lists. At least in that instance there can be some control on the level of borrowings involved.

Quite, while I don't agree 100% (or 92% or 90%) mortgages are inherently bad, there might well be better schemes. I have serious reservations about the current set up. In all honesty I don't see why a simple LTI adjustment wouldn't have done the majority of what they are looking to do - unless of course they expect a dip and want to protect themselves there - but again we then start getting into a debate about negative equity not being as big a issue as some make out.

Michael D Not Higgins

Deleted User wrote: »

This article says the CB will 'announce' its new rules in January as it will take several weeks to go through all the submissions.

It was always a very tight timescale. How did they not see that from the start?

157 submissions, some light Christmas time reading for them so.

Michael D Not Higgins

MarkAnthony wrote: »

I don't necessarily agree but I take your point. I would argue though that these were a drop in the ocean compared to investors getting in. It's clear they're the ones driving it this time.

I'd also submit that it was people who could easily afford 20% deposits being offered silly multiples of salary that was the major issue.



Quite, while I don't agree 100% (or 92% or 90%) mortgages are inherently bad, there might well be better schemes. I have serious reservations about the current set up. In all honesty I don't see why a simple LTI adjustment wouldn't have done the majority of what they are looking to do - unless of course they expect a dip and want to protect themselves there - but again we then start getting into a debate about negative equity not being as big a issue as some make out.

I agree in part. The multiples were the main driver of the price inflation. Investors and cash buyers are the drivers of the last year's worth of price increases.

As I've mentioned before in this thread, the LTI protects the individual, the LTV protects the system. They're regulating both sides of the market. Their research backs up the fact that people are less likely to default on a mortgage when they have more equity built up in it. They're less likely to have problems in the first place if they don't borrow 5 times their salary.

Mine was very short and was sent early in the process

Seriously, if the DoF and the banks hadn't waited until the last minute to deliver their relatively lengthy submissions it would have helped things along - although that is obviously not the goal of the DoF or the banks!

Sala

Deleted User wrote: »

Mine was very short and was sent early in the process

Seriously, if the DoF and the banks hadn't waited until the last minute to deliver their relatively lengthy submissions it would have helped things along - although that is obviously not the goal of the DoF or the banks!

Fair play to you. But I suspect certain bodies who are opposed to the plan may want to cause as much delay as they could!!

Reading here, the pin, askaboutmoney etc the same arguments for/against are being discussed. I reckon all submissions will be able to be broken down quite easily... it won't really be 157 very individual submissions but rather a number of core ideas for the CB to engage with.

Barely Hedged

MarkAnthony wrote: »

@Barely - thanks for pointing this one out but I've no interest in continuing the argument with you, it's descended into petty bickering (on both our parts) please stop trying to continue that by extension, thanks.

As for moving it to another thread, I think alternate schemes is worthy of discussion and on topic but I'll be guided by other people's views on whether this is the right place. I'll say no more about it if no more is said.

It didnt descend into petty bickering. It descended into farce because you wouldnt answer anything about your proposals to offset the impact of the CB's new rules that you were probed about. Instead you deflected every question with gems such as:

MarkAnthony wrote: »

You misread even that - go over my posts.

I most certainly didnt and i did go over your posts unlike you as you clearly didnt go over mine.

MarkAnthony wrote: »

misread and misinterpreted things and not been able to follow the thread. As I say I think we've both made up our minds, carry on.

In response to paragraphed questions which pretty much re-typed your points you said i had mis-interpreted what you were saying. How can i mis-interpret your opinion or not follow if i re-type your quotes?

MarkAnthony wrote: »

it's pretty clear you've been unable to engage with the issues until your recent posts.

Again, re-typing your points and getting no answer from you when i probe you on your solutions is me not engaging???

MarkAnthony wrote: »

Please restate them as some of them were made before you had read through what I had written.

EDIT: Might be worth us moving to a separate thread also.

Why do i need to restate something i responded to you at length about three posts previous and the comment about moving it to a seperate thread was great. What would the title of the thread be. "Man makes outrageous points and when questioned on them posts circular messages. See how many pages he can go before actually answering the questions".

Theres no need to move it to a seperate thread because all the points you have raised and been questioned on are directly related to the thread title. The issue is, you dont want to answer them because you cant.

So in summary - here are my questions listed below to the solutions you have proposed. You can either answer them, or deflect them but they are the solutions you have raised and are directly related to the thread title.

Give people who want to settle for a long time 100% mortgages. How do you define that and how do we know somebody will be living there? So much abuse of that is possible.

Give people with a good credit history but no savings 100% mortgages? Is saving cash and having a buffer in your bank account not considered the definition of good creditworthiness? Why should they get priority over people with cash savings?

Let people who buy in an area thats relatively cheap with full mortgages. Define relative? You think then that independent valuations will be a safe guard. Valuations are based on previously sold prices and price by sq m. In your example shift 100% mortgages to Coolock. People start chasing and pushing up selling prices with 100% levergaed debt. The valuations are then based on these inflated selling prices. Wheres your safe guard then? Cap the sq m price of a house in Coolock? I couldnt begin to tell you how many issues would be associated with it.

If it's vastly cheaper to buy than it is to rent, why is assisting people to buy a bad thing, given the right safeguards being put in place?
Youre putting all these unquantifiable phrases forward like "vastly cheaper" but have nothing to back up your phrases. Yeah, they sound great and people who are renting love to hear them but theyre not actually true. A mortgage is a > 20 year committment and its common in Ireland for 30 year mortgages. Youre saying solve the rental crisis of the past year and a half by ushering mortgages on people for 20-30 years and even go as far as 100% mortgages. Can you not understand how short sighted that is? Added to that how many expenses do landlords incurr that youre leaving out? Boiler breakdown, leaking taps, leaking roof, water charges, property tax

MarkAnthony

I can see you're really upset, I'm sorry that was not my intention.

In regards to out of context you are saying thing like 'would solve the rental crisis' where what I have said it there is a rental crisis and measures like this might help in limited circumstances. As for the extra expense argument that was dealt with in a post to another person discussing - this is what I mean by missing posts, sorry for not being clearer.

This is why I feel that we should not engage any further the only interest seems to be a tit-for-tat back and forth and not an all encompassing discussion. Again I'm really sorry that this has resulted in upset for you that was not my intention.

I hope everything works out for you.