Laws that came into force yesterday will remove the most substandard bedsit accommodation from the rental market, housing charity Threshold said.
The standards that private rented property must meet are laid out in the Housing (Standards for Rented Housing) Regulations 2008 and 2009. All the provisions applied to new tenancies in properties let for the first time since February 1st, 2009. Since yesterday, all tenancies are required to comply with all provisions.
Threshold said this would see the end of traditional bedsit accommodation and improve requirements for private rented accommodation.
Chief executive Bob Jordan said the regulations would serve to remove the “bottom layer” or the most substandard accommodation in the country. He acknowledged they involved costs for landlords but said the new rules had been flagged four years ago.
The main concern was that local authorities would carry out inspections to make sure people were not living in substandard conditions.
Some of the most vulnerable people in the country were living in bedsits, which provided very basic accommodation with no shower or bathroom and no central heating, Mr Jordan said. “This accommodation does not comply with modern standards,” he said.
Threshold expected that where landlords were found not to be in compliance with regulations, the relevant local authority would take action and take them to court if necessary.
The number of bedsits has declined from about 9,000 in 2006 to about 5,000 in 2011.
Groups such as the Irish Property Owners’ Association oppose the new regulations and say many landlords cannot afford to renovate their properties or get loans to upgrade them.
Tuesday, February 5, 2013
Substandard bedsits are made illegal - The Irish Times - Sat, Feb 02, 2013
'Quick-fire sales' are not always that fast to process - Independent.ie
Buyer perceptions that a receivership sale may be a 'quick-fire sale' can prove unfounded. Because many receivership properties are sold through auctions this gives the impression that such distressed property sales are processed in just a few weeks. In fact, a lot of expertise and preparatory work is required to ensure the sale process works efficiently.
It is for this reason banks are increasingly turning to fixed-charge receivers to handle the disposal of problem properties.
Usually such fixed-charge receivers are chartered surveyers with property expertise, rather than chartered accountants with business and finance expertise, who usually handle company receiverships.
A fixed-charge receiver is appointed only for property issues such as commercial and residential buildings or land. They will not take control of an existing/trading business as this traditional corporate receiverships is still very much for accountants.
The number of fixed-charge receiverships has increased over the past two years as financial institutions in Ireland have become aware of the benefits of the process once a borrower has defaulted on the terms of their mortgage.
While a fixed-charge receiver is appointed by a financial institution, nevertheless they have to act as the agent for the borrower. This means that the receiver has a duty of care to both parties and the ultimate goal is to maximise the level of return, thus reducing the level of debt which is of benefit to the lender and the borrower.
Given the severe downturn in the property market, the financial institutions are concentrating on protecting the value of their loan books, the predominant value of the loan books being the bricks and mortar.
Neil Bannon, who acts as a fixed-charge receiver for a number of the financial institutions, noted that all receiverships are a process but the reason for the process is generally caused by property related matters.
Paddy O' Connor, a senior member of Bannon's receivership team, believes that "proprieties in receivership tend to have complicated issues that require property expertise in order to provide a solution. These complicated issues or 'barriers to sale' generally include issues which property surveyors deal with on a day-to-day basis." Such issues include legal title, lease restructuring, rent abatements/arrears, rates arrears, over-holding, compliance etc.
It is a quick and cost-effective way to deal with the process as the fixed-charge receiver has the necessary property expertise to deal with the problematic properties.
Neil Bannon, who is the only Irish-based fixed-charge receiver recognised as a registered property receiver under the joint scheme run by the Insolvency Practitioners Association and the Royal Institution of Chartered Surveyors, stated that "the clear advantage of a fixed-charge receiver is the property experience and market knowledge brought to the process. A fixed-charge receiver's core skill is identifying the optimum value for real estate and the establishment and implementation of a strategy to extract this value".
It is also important for purchasers to be aware that certain difficulties may arise from receivership sales. There may be a potential gap in information on the property's history prior to the receiver's appointment.
Gaps in items such as VAT history, land/property registration, planning compliance etc. may cause difficulty for a purchaser.
Consequently, receiver sales tend to be slower than private market sales.
Ireland leads in housing affordability - The Irish Times - Thu, Jan 31, 2013
Housing affordability has improved more in Ireland than in any developed country in the English-speaking world, an international report has found.
The ninth annual Demographia International Housing Affordability survey found house prices in Ireland are now on average 3.2 times gross annual incomes, making Ireland and the US (3.1) the most affordable of seven countries surveyed.
The survey has been tracking house prices in Australia, Canada, China (Hong Kong), Ireland, New Zealand, the UK and the US over the last nine years.
The survey is confined to English-speaking countries that have similar patterns of home ownership and excludes European countries where home ownership is historically lower.
It defines affordability as a situation where house prices are three times gross annual income before tax, or less.
The only cities with a population of more than one million to meet the criteria were all in the US. There were 20 such cities, most of which have been badly affected by deindustrialisation, including Detroit, Cincinnati, Cleveland and Indianapolis.
After Edmonton in Canada, Dublin was the most affordable of the major metropolises. House prices peaked at six times the average salary in Dublin in 2006; they have now dropped to 3.6 times the average salary.
Up until the late 1980s and early 1990s, house prices were a multiple of between two and three times’ average salaries in all the markets surveyed, before deteriorating in the years after that.
The survey says the principal reason for house inflation has been the curtailment in the supply of development land.
It also maintains there is a consistent pattern in all countries where there has been a tendency by vested interests to “cheer on” house-price inflation, as if houses were a “commodity like gold” instead of a basic necessity.
The cheapest city in Ireland relative to income is Waterford (2.5), followed by Limerick (3.1), Galway (3.2) and Cork (3.4).
In the last quarter of 2007, at the height of the property boom, house prices in Ireland were a multiple of 4.7 times the average gross salary.
By contrast Australia, the most popular destination of the current crop of Irish emigrants, has some of the most unaffordable urban housing. It uses just 0.04 per cent of its land area for housing.
The average house in Sydney costs 8.3 times the average salary, in Melbourne it’s 7.5 times salary, in Adelaide it’s 6.5 and in Perth it’s 5.6. The average home in a major Australian city costs 6.5 times the average salary.
New Zealand’s only major metropolis, Auckland, is also classified as being severely unaffordable, with house prices 6.7 times the average salary.
London is the fifth-most-unaffordable city surveyed, with house prices a multiple of 7.5 times gross salaries.
The UK has no major market where house prices are less than four times the average gross salary.
Thursday, January 31, 2013
€29.8bn home equity withdrawn | Irish Examiner
Houseowners withdrew €29.8bn of housing equity between the third quarter of 2002 and the first quarter of 2009, according to a report released by the Central Bank today.
By John Walsh, Business CorrespondentThis level of equity withdrawal was unprecedented in this country by historical standards. It was also extremely large by international standards.Homeowner equity withdrawal is common in economies that experience sharp rises in house prices.
This was driven by three factors in Ireland over that period, according to the Central Bank.
“There was a significant increase in the propensity for existing homeowners to take out top-up loans during this period; second, the combined effect of large numbers of transactions and booming house prices meant that sellers in the final link of a property-transaction chain, ie those not purchasing another property, withdrew substantial equity upon selling; and third, relative to equity withdrawals, the rate of equity injections declined due to a fall in deposits from first-time buyers and a decline in the rate of amortisation.
“The latter was driven by the increased prevalence of interest-only loans and significantly longer loan-terms. The dramatic collapse in the Irish property market means that all of these factors have been reversed, moving the household sector from one of net equity withdrawal to net equity injection,” said the Central Bank.
The study covers the period from 1978 to 2012. From the late seventies to the early noughties, Irish homeowners for the most part paid down mortgage debt. However, from 2002 onwards, this country experienced one of the biggest housing bubbles in any western economy. But since 2008, there has been roughly a 60% fall in house prices.
The Central Bank notes that over the past five years homeowners have reverted to paying down debt, including mortgage debt.
“A number of factors contribute to this current period of aggregate equity injection, including a reduction in the number of mortgage transactions, a tightening of credit conditions and the reduction by households of their financial liabilities.
“The main reason for the current low levels of equity withdrawal is the lack of housing market transactions, after a number of years of falling house prices, which in turn means fewer opportunities for sellers to realise housing equity. Irish households have suffered large declines in net worth as a result of the drop in valuations of their properties.
“This has also contributed towards households reducing aggregate equity withdrawals.”
In another paper released by the Central Bank today, it shows that in the second quarter of last year, non-financial corporations had the second highest debt levels relative to GDP in the EU. However, this masked two very distinct trends.
Multinationals based in Ireland have ramped up their debt over the past few years to reflect increased levels of activity.
But when this debt is measured against their balance sheets, the overall debt levels are below the EU average.
Irish-owned companies are heavily reliant on the domestic banking system for credit. Since the crash they have paid back roughly €10bn in bank loans.
House sales jump by 34pc as banks increase lending - Independent.ie
THE numbers of houses and apartments bought and sold last year rose sharply, in a further sign the market has stabilised.
The number of residential property transactions jumped by 34pc to 24,000, according to information on the new property price register.
And there has been a big rise in the numbers of mortgage-backed buyers snapping up properties at the Allsop Space auctions.
Now, just half of the properties are being purchased with cash.
Up until recently, eight out of 10 successful bidders were cash buyers, but now there is an even split between those buying with cash and those using mortgage funding.
Allsop Space director Robert Hoban said the surge in the numbers buying with a mortgage was evidence of greater lending activity by the banks.
And Allsop claims a large number of properties auctioned achieved higher prices than in private sales, according to statistics for the nine auctions held so far, and seen by the Irish Independent, show.
Mr Hoban said this was particularly the case with high-end properties.
He said a Northumberland Road property in Dublin had sold for €550,000 last summer. When it was auctioned by Allsop Space in October, it achieved €685,000.
Half of the 777 properties sold in the nine auctions so far were for people to live in, with around half bought by investors.
Some 13pc of buyers were based overseas, he said.
A total of five Allsop auctions are planned this year, with an expectation that there could be up to 200 lots in each one. This is double the average for each of the five auctions held last year.
There was disappointment earlier this week when the Central Statistics Office said property prices fell in December. This was despite rises in four of the previous six months.
A number of property commentators questioned the accuracy of the CSO figures, which do not include cash purchases.
But now it has emerged that there was a marked rise in the number of residential properties transacted across the entire market in 2012, data from the Property Price Register shows.
Rush
Some 24,249 properties were transacted in 2012, up 34pc from the previous year, according to an analysis of the register by NCB Stockbrokers' chief economist Philip O'Sullivan.
He said the big rise in the number of transactions was a sign that residential property prices had begun to stabilise.
Almost half of the houses and apartments transacted were in Dublin.
"While the strong finish to 2012 is likely to have been partly driven by a rush to avail of mortgage interest relief before its phasing out on December 31, the data shows a marked pick-up in transactions activity throughout the whole of last year, with every month recording gains of between 12pc and 53pc on an annual basis," Mr O'Sullivan said.