Mortgage Lending down 52%

Figures released by the Irish Bankers Federation show that the total value of mortgage lending by banks has dropped 52% in the last quarter compared to the same quarter of 2010.

First Time Buyers made up 42% of borrowing with lending for investment property at a paltry 4% of the market.

The average new residential mortgage now stands at just €200,000, the lowest level since 2005.

We are in a bit of a chicken and egg situation at the moment, if the banks wont lend to good buyers, property prices will continue to fall which will mean that the banks become even more reluctant to lend!

FS

Make sure you are receiving your Tax relief

While most property related tax reliefs have been abolished over the last few budgets, a number still remain. Its important to take some time to make sure you are aware of what qualifies for relief.

Some of these reliefs are available to be claimed back at the end of the year and some are TRS (Tax relief at source).

• Pension contributions
• Income protection policies
• Mortgage interest relief
• Rent relief
• Private medical insurance policies
• Medical expenses
• Service charges (Bins etc)
• Trade Union Subscriptions (up to 01/01/2011)
• Tuition Fees
• Interest relief (Unsecured home improvement loans)
• Rent a room scheme
• Childcare services (in your own home, up to €15k)

Details on all the current reliefs are available on the Revenue website.
FS

'No guarantee' charge to stay at €100

Minister for the Environment Phil Hogan today admitted that the household charge (announced only 24 hours ago) could not be guaranteed to remain at €100 for the next two years. He said that it was up to the minister for finance to review the charge in the run up to budget 2013. The idea is that the flat rate charge will be replaced by metered water charges and a valuation based property tax in 2014.

€160m will be collected by this charge next year to help pay for local authority services. There will be exemptions but they are few, they include:
-People in receipt of mortgage interest supplement
-People living in local authority housing
-People living in 'Ghost Estates'

Pensioners and people on social welfare will be liable to pay it, as will people who already pay a second home tax. The government has tried to sweeten the bitter pill by saying that it equates to 'only' €2 per week. That's all very well to say, its a drop in the ocean for the wealthy but makes up a massive 1% of your income should you be a single person reliant on social welfare.

Joe Higgins and the other members of the United left Alliance have announced that they will organise a civil disobedience campaign against the tax, encouraging non payment.

Roll on a 'Autumn' of discontent.

FS

Property dilemma - Sell, rent or buy

If you bought your home in the last few years, you may now find yourself in negative equity. If you have no plans to move and you can afford your mortgage repayments, then negative equity shouldn’t be an immediate problem for you.
However, if you are looking to move up the property ladder (for example if you’re planning on having children or moving in together, or you need to move for work reasons) it can become a problem because you may have to sell your home for less than you owe.
So, what are your options?
Stay put and save
If you can put off moving for a little while and you can afford to do it, then you could stay put and try to set aside some savings in a regular savings account to cover the shortfall if you do decide to sell. Or, if you can afford it, another option is to overpay your mortgage. This will reduce the amount you owe on your mortgage, but may only be an option for you if you have a variable rate mortgage (this includes tracker rates). With a fixed rate mortgage, you can’t usually make additional payments without penalty.
Try to sell your home and buy another
You could also consider selling your property at a loss. However, you will need to make up the shortfall between what you owe on your mortgage and the proceeds you will make from selling. So, unless you have savings put aside, this will not be an option. And, if you do have savings, bear in mind that covering the shortfall will eat into the deposit that you would use to buy a new property.
Get more information on what to consider
Rent out your property and buy again
Instead of selling, another option is to rent out your property and buy a new one. Of course, whether this is an option or not depends on:

• how much rent you could get and whether it would cover the current mortgage and other expenses
• whether you will be able to get a second mortgage and
• whether you have a deposit to buy a new property

Get more information on what to consider
Rent out your property and rent another
If you cannot stay put, maybe because of a growing family or work, but selling is not an option, you could also consider renting out your own property and renting a bigger home or one in a more convenient location. Again, you’ll need to consider whether you can get enough rental income to cover your mortgage and allow you to pay monthly rent on another property.
Get more information on what to consider

Taken from:

http://www.itsyourmoney.ie/index.jsp?p=100&n=569&a=1463

FS