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Downturn good news for first-time buyers
Tuesday, 28 July 2009
Business leader Will McKee joins Angela McGowan, Northern Bank chief economist with Siobhan McAleer, Mortgage Shop and Joanne O'Doherty of HP Ireland
enlargeFirst time buyers in Northern Ireland are being urged to take advantage of the economic downturn to get a foot on the property ladder.
The current downturn in the housing market presents a unique opportunity for first time buyers to achieve householder status after years of remaining outside the market due to inflated house prices, according to business leader Siobhan McAleer, founder of the Mortgage Shop.
She said: “First time buyers must see the current economic conditions as an opportunity to get onto the housing ladder. Many people who have been sitting outside the housing market and have been wise enough to save a deposit will, for the first time in five years, be best placed to purchase a property within an affordable price range.
“Those who have not got a deposit saved may find it more challenging to secure a mortgage although many are seeing how low property prices currently are and as a result are securing deposits from family and friends.”
Ms McAleer was speaking at the conclusion of the ‘Business Answers for SMEs’ roadshow organised by Hewlett-Packard.
She said that a combination of low housing prices, historically low interest rates and increasing access to mortgages provides a window of opportunity for first time buyers.
The mortgage expert said the most recent research shows that property prices in Northern Ireland have decreased by almost 20% in the last year and this has prompted first time buyers to enter the market.
Ms McAleer added: “The mortgage market is slowly picking up with recent data showing it has increased and the average amount borrowed by first-time buyers for a home loan rose slightly to £96,000 the first rise since 2008.
“Many first time buyers still have to put down an average deposit of 25% of the value of their new home and that’s why it’s important that first time buyers are seeking assistance from family who understand that currently the housing market is in their favour.”
The ‘Business Answers for SMEs’ roadshow which has been organised locally by Hewlett-Packard in association with Nitec is part of a seminar series in Belfast, Londonderry and Coleraine. The roadshow aimed to share insights on how businesses can manage their way through difficult economic conditions.
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baz, the fact that you bought your houses 10 years ago is so telling. Could you buy 10 houses now? I doubt it. People like you with your "I'm all right jack" attitude are killing the UK economy. Does it never occur to you that it might be better for your kids to have the same opportunities as you did? Or do you like them being reliant on you for such a huge amount of financial support? Until everyone WAKES UP to the fact that high house prices are bad we will never have the social mobility required for a healthy economy.
Posted by Dave | 31.07.09, 20:06 GMT
My mammy and daddy refuse to give me £40,000 to buy a house. They say it's their money and I'm a big boy now who should look after himself. I feel unloved. Should I phone Childline?
Posted by neil, age 32 and a half | 31.07.09, 19:06 GMT
Well, Baz, you would be well advised to keep quiet about this crash being over. Otherwise everyone will want a piece of the buy-to-let pie and you will have to pay more to expand your empire. Either that or you are cheerleading with the intention of getting out soon to minimize your losses. If today's values don't matter, why do you feel the need to keep telling us about them?
Or could it be that you're just whistling in the dark at the prospect of rapidly increasing losses?
Whatever it is you've an illogical need to have us believe you're getting richer.
By the way, you have no idea what rents and mortgages will cost in years to come, although it's a fair bet interest rates will be higher since they're very low now. Surely if the last year or so has taught us anything it's that you can't rely on old certainties.
Posted by nostradamus | 31.07.09, 13:26 GMT
House prices here in NI have still a long way to go - DOWN!
Wasn't it the Belfast Telegraph, who in 2007 were writing articles about FTB needing to get on the ladder now before they missed out, and Helen Carson (property correspondant for BT) going on about a 2 up 2 down terrace in Belfast will not be bought for under £250k?!! You can pick up one in an auction now for 50k and lucky to get 80k on an open market!
Wake up and smell the vested interests of this newspaper and their other website 'property news'.
Posted by lies | 31.07.09, 10:30 GMT
Touching a nerve are we Baz? You get very defensive when we mention anything. All I'm doing is warning others not to make the same mistakes as those that bought in 07 and 08. I couldn't care less about you and your situation, hope your kids love their flats. As long as people see that there is more to go in this crash the better for them to be informed. The lower the house prices for everyone the better it will be for everyone.
Interest rates are only going one way and that is up so if they get a "deal" now then what's to say that they can afford it when we start paying back what the government borrowed.
And yes I seriously have more things to do thanks :) what about you?
Posted by Paul aka Subby | 31.07.09, 09:33 GMT
Doesn't matter, Dave. I bought them about 10 years ago and they are for my kids to have in about 20 years. oh, and the rent will have all the mortgages paid off completely in about 5 years.
I might as well worry about how the current strength of the euro will affect a holiday I intend to take to Galway in 2029.
If you are not clever enough to understand that, then it really is no surprise that you aren't clever enough to see that the crash is over.
Oh, and by the way, the crash started in May 2007, not august, it is just that only people who really know the market are aware of that. The rest of you were about 3 months behind, because you rely on official data. Just like now.
Posted by baz | 30.07.09, 07:50 GMT
baz would you care to tell use how much paper value your property investments have lost you since August 2007? Or would it be too painful to add it up?
Posted by Dave | 29.07.09, 17:51 GMT
Oh good, Dave commented too. If it wasn't for Dave and Subby's blinkered views I might accidentally believe the indesputable evidence that the crash is over and prices have bottomed out.
Thanks Dave and Subby! Keep up the good, although ultimately pointless, work.
Posted by baz | 29.07.09, 12:43 GMT
"The current downturn in the housing market presents a unique opportunity for first time buyers to achieve householder status"
Absolute BS. Before the embarrassing property boom here, first time buyers also had a "unique opportunity" to achieve householder status.
Why does the BT insist on peddling advertisements by property industry insiders as news?
Posted by Dave | 29.07.09, 06:39 GMT
Why isn't this article in the ' class ads ' section.
Posted by john | 29.07.09, 00:19 GMT
Alternatively, first time buyers can wait for prices to drop further meaning they need a smaller deposit in terms of pounds and also have a lower overall mortgage for the same home!
Posted by The Real Liam | 28.07.09, 18:52 GMT
FTBers would be unwise to buy now.
Job security is a very real concern - no jobs are safe and mortgage repayments are not paid by the dole.
Posted by Bobby D'Hofter | 28.07.09, 18:36 GMT
You do know why the banks want a 25% deposit? They have to protect themselves against a 25% depreciation. Don't do it, people - wait for that drop.
Posted by nostradamus | 28.07.09, 18:09 GMT
subby,
have you seriously got nothing better to do? seriously?
Posted by baz | 28.07.09, 16:56 GMT
let me get this straight, northern bank economists( paid by banks) and a mortgage broker(makes money by selling mortgages) think nows a good time to get into debt at up to 5x avg earnings with record low INTERESTS RATES that can only rise and rising unemployment with large tax rises on the way due to browns dire economic mess.
out of interest would any of these vested interested parties ever think theres ever a bad time to jump into debt?
Posted by tony | 28.07.09, 16:29 GMT
"...Many first time buyers still have to put down an average deposit of 25% of the value of their new home and that’s why it’s important that first time buyers are seeking assistance from family who understand that currently the housing market is in their favour..."
Not too many first time buyers with a 25% deposit that most banks are looking for just now. As well as not too many relatives having a spare £25-£30k lying about for a deposit...But don't let that minor fact ruin a perfectly good Bel Tel ramping article
Posted by Paul aka Subby | 28.07.09, 15:12 GMT