This past few weeks I met with some bankers to hear their take on the property market. The result of these conversations was encouraging insofar as they provided evidence of increased competition amongst the banks. Admittedly progress is slow, but every little helps as they say. One bank is offering ‘negative equity mortgages’, which will allow some homeowners, if they satisfy certain criteria, to move home even if their current home is in negative equity. This is very welcome as many homeowners, especially those who bought a property in the past 10 years or so will find themselves in this position.
A competitor bank will recognise a proportion of overtime earnings when calculating disposable income, which will be a relief to those who are obliged to work a lot of overtime. Most banks do not take overtime into account at all. The same bank is also taking account of 25% of rental income in its calculation of disposable income. The expectation is that the proportion will be increased in the near term.
The latest IBF/PwC ‘New Lending’ report is encouraging also as it indicates that a total of €750 million in mortgages were drawn down in the 3rd quarter of 2013. This is 13.1% more than in the 3rd quarter of 2012 and 44.8% more than in the 2nd quarter of 2013. FTBs and movers combined made up more that 90% of the market in the 3rd quarter. This shows that lending is on the increase and hopefully this trend will continue.
In Carlow 2013 has seen a marked improvement in sales activity since the summer. My expectation is that this trend will continue in 2014 and that the market will continue to recover albeit slowly.
Eoin Kehoe is the owner of Kehoe Auctioneers, 57 Dublin Street, Carlow.