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Rental crisis deepens in first quarter.

Rents rose by 6.9 per cent nationwide in the year to the end of March, according to new figures published by the Private Residential Tenancies Board (PRTB)..

The latest PRTB Quarterly Rent Index, which is compiled by the Economic and Social Research Institute (ERSI) indicates that rents for houses rose 6.5 per cent while apartment rents increased by 7.8 per cent.

In Dublin, where costs are usually higher, house rents were up 9 per cent in the year with apartment rents jumping by 10.8 per cent.

In monetary terms, the rent for private sector accommodation across the whole country rose €54 in the year from €781 to €835. The rents for apartments increased on average by €63 in the 12 months to the end of March while rents for houses were up €49 to €814.

In Dublin, the average cost to rent was €1,325 for a house and €1,205 for an apartment. This compares to €1,215 and €1,087 respectively for the same period a year earlier.

10 moments when you should review your life cover.

Life insurance is one of those things people forget about once they’ve bought it. However, you need to review it occasionally as your situation and your commitments change.

Here are 10 instances when a life cover review is essential:

1 Buying a house

Your mortgage will be the biggest debt you ever take on. You need to be sure it will be paid off should you die early, especially if you’re the main breadwinner.Banks and lenders often try to sell you life insurance when you start on the property ladder, but you should always compare prices before going ahead as there could be better and cheaper cover elsewhere.

2 Getting Married

Once all the fun of your wedding is over, you need to think about your new responsibilities. How would your partner cope alone with all the financial commitments you’ve taken on if they can’t rely on your salary too?

3 Having your first child

If you haven’t already bought life cover, it’s vital to buy it once you start a family. And if you have only insured for a small amount, you definitely need to review it now. Food, clothing, child care, schooling and even holidays all cost more once you have a little one.

4 Adding to your family

A second, third or more children all put a strain on your household budget. You’ve probably already noticed how much more salary you need to keep the family going. Is your life cover enough to pay for their needs should the worst happen and you are no longer there to provide for them?

5 Moving home

A larger home is likely to mean a bigger mortgage. Make sure your life insurance is enough to pay it off and, if you’ve increased the term of your home loan, that it runs for long enough.

6 Inheritance planning

Life insurance isn’t just about paying off large debts such as your mortgage should you die. It’s also about providing for your family’s day-to-day bills once you are no longer bringing in a salary.

7 Moving job

Many employers offer a perk known as ‘death in service’ benefit. This provides a lump sum to your named beneficiaries should you die while working for the firm. The amount is typically set at four times your annual salary.

If you move job, check the terms of your new employment. If you no longer have this benefit, you could need to increase the amount of life cover you have.

8 Retiring

Depending on your pension, it may mean that once you die your pension stops or at the very least your widow or widower will receive a smaller amount. If you’re worried they won’t have enough to live on without your pension, you could continue your life insurance.

9 Getting healthier

If you give up smoking, tell your insurer. Your premiums may come down. If not, you can look around for another insurer to see if it will be cheaper.

You must have given up smoking for at least 12 months before it counts and you can’t still be using nicotine replacement products such as inhalers, patches or chewing gum.

10 Dangerous activities

Those who take part in dangerous sports and hobbies such as flying, climbing, scuba diving and parachuting, will be considered a higher risk than normal and will no doubt have to pay a higher premium. Alternatively, your cover will exclude death as a result of one of these activities. If the company didn’t know about these activities and you die as a result, the claim is unlikely to be paid

Haven lead the way for mortgage rate reductions

As previously mentioned, Haven announced reductions to their range of fixed and variable mortgage rates.

They are now market leaders with their 2,3,4 and 5 year fixed rates. These discounts are  available to both new and existing customers.

Reductions vary between 0.10% and 0.20%. For example, a 2 year fixed rate that was 3.80% now stands at 3.60%- giving a generous 0.20% back to customers.

With effect from 1st June 2015 their standard variable rate will be reduced by 0.38%- dropping it from 4.35% to 3.97%.

Should you require any further information please get in touch with our brokerage team on 01-5052718 or email us at info@coonanmortgage.com

Deposit rate cuts mean just a third think now is a good time to save

ONLY a third of people believe that now is a good time to save, a new survey has found.

Savers have become more cautious about saving as banks continuously cut deposit rates.

The savings index found that just 32pc of people believe that now is a good time to save. But there has been a slight rise in the numbers who save regularly, up to 43pc in March.

Meanwhile, 80pc of adults under 35 don’t know the level of the State pension.

Half believe that they will have to work to at least 70, and over one third say they will need to work as long as they can.

The survey, commissioned by the Irish Association of Pension Funds (IAPF) and conducted by IReach, found older people have more awareness about pensions.

The function of the survey was to examine retirement planning in Ireland and whether people are being realistic as to their expectations for retirement age.

It estimates that those over 55 facing retirement appear to have greater awareness, with over 60pc knowing how much they will receive from the State when they retire.

The survey shows that pension participation is poor, with just 50pc of workers saving for retirement.

Haven Reduce Mortgage Interest Rates.

Haven are delighted to announce reductions to their suite of mortgage rates.. Applying to their fixed, standard variable and LTV variable rate products, these changes are a further demonstration of Haven’s desire to deliver real value for customers.

Standard variable rates are being cut from 4.35% to 3.97%, an overall reduction of 0.38%. LTV variable rates have been slashed by 0.25% across the board.

Two to five year fixed rates will see a drop of anywhere between 0.10% to 0.20% -depending on the fixed term.

Changes to fixed and LTV variable rates are effective from 7th May 2015, while the standard variable rates reduction comes in to effect in June 2015.

If you would like to discuss any of these changes further please do no hesitate to get in touch with us today.

Are first-time buyers being ruled out of the market?

The property market in Dublin and other sought-after areas has slowed significantly because first-time buyers (FTBs) can’t get mortgages to buy properties there under the new Central Bank rules.

Typical working couples are getting approved for €100,000 less in mortgage borrowings under those rules. This is forcing FTBs to either rent or to buy further afield. It is also believed the recently discussed first-time buyer grant, if re-introduced, will be of little, if any, help to house hunters. The State grant, which would likely be between €3,000 and €5,000, was discussed at a Labour Party parliamentary meeting earlier this month.

A couple earning €75,000 between them, which is around the average wage each, could have borrowed between €340,000 and €360,000 before the rules kicked in on February 9 – as long as they could prove they were saving or paying rent equivalent to the mortgage repayments on that mortgage for at least six months. That couple could today borrow €262,000 – that’s a massive drop.”

FTBs on average salaries who are looking to buy property in or near Dublin have been hammered by the new rules.

The average first-time buyer will find it harder to get a deposit together so they can buy in Dublin, even Lucan or Celbridge may be beyond their reach. So they have been driven to look to commuter belt areas like Enfield, Kilcock, Portlaoise and Drogheda.

 

Dubliners hit hardest with new lending rules.

The new Central Bank rules on mortgage lending, while not as harsh as expected, still came as a huge blow to many house hunters. Most of those looking to buy a home today must now get together a larger deposit than had previously been the case.

We are in a state of flux at the moment when it comes to analysing the real impact of the new rules and ultimately it is still much too early to tell.

Many people had mortgage approval from banks before the rules kicked in and they still have time to proceed with these mortgage agreements to buy a property. Hence, much of the activity we are seeing on the market now is from these people.

What has become glaringly apparent is that where you want to live in the country will be a huge factor in determining the impact of the new rules. Ultimately, first-time buyers in Dublin, particularly those on low or middle incomes, have been crucified

Under the new rules, first-time buyers still only need a 10pc deposit – as long as the house they are buying is worth no more than €220,000. Otherwise, they must have a higher deposit for the portion of the home that is worth more than €220,000.

The average asking price nationwide is now €201,000, according to the latest house price report from Daft.ie. As this is below the €220,000 limit, many first-time buyers won’t be put out by the new rules. However, this is just a national average – the county averages vary hugely.

The most expensive areas in Ireland to buy three-bedroom properties are unsurprisingly all in Dublin. The average asking prices in Dublin, as well as Kildare and Wicklow, are well above the national average. However, average asking prices in Cork, Galway and Limerick are below the national average.

So what can house hunters do to ensure they can buy within the boundaries of the new rules?

First, if you have been saving for a deposit, continue to save. While you may have to alter the value of the properties you have been looking at, you don’t know what the future will bring and what will happen to house prices.

Second, don’t rush! All this uncertainty makes people on edge and often people can make rash decisions when they are feeling like that. Buying a house is a huge and long-term purchase. So the same deciding factors apply. Is it an area that you want to live in? Can you imagine yourself there long-term? And so on.

Third, affordability is key. It’s not just up to the banks or the regulatory bodies to ascertain whether or not you can realistically afford a property. Be prudent. You’re the one who will have to meet the monthly repayments which will directly impact the lifestyle you can have.

Irish house buyers being charged much higher interest rates than others in europe – Central Bank

Irish house buyers are being charged way above the euro zone average in interest on their mortgages, according to the latest Central Bank data.

The cost of a typical new mortgage here increased in February, according to new figures from the Central Bank.

The average interest rate charged for a new variable rate mortgage was 4.2pc in Ireland at the end of February, according to the Central Bank.

The latest figures will add to the controversy over the high cost of Irish loans for customers with Standard Variable Rate mortgages.

When the interest rate on restructured home loans is included the average cost of a new or restructured mortgage falls to 3.38pc. The euro area average was 2.09pc

The average interest paid by all mortgage borrowers however is 2.72pc, a figure that reflects the nearly one-in-two home loans with a tracker rate that has an explicit link to the official ECB rate.

 

Help needed for those on sky-high variable mortgage rates.

TAOISEACH Enda Kenny has no plans to force banks to reduce sky-high variable mortgage rates, beyond asking them to show their customers “a degree of understanding”.

Mr Kenny appeared to be laying the groundwork for a U-turn on the Government stance that it cannot intervene in the day-to-day workings of the banks yesterday, by saying he would put pressure on them to cut variable rate holders some slack and pass on lower European Central Bank rates.

“I expect the banks to do better than they have been doing in respect of variable mortgage interest rates,” he said.

However, his spokesperson said there was “nothing further to add” when questioned last night as to what Mr Kenny would do if banks didn’t reduce home-loan payments.

More than 300,000 families on variable rates are paying interest rates that are four times higher than those on tracker rates.

Showing up Mr Kenny’s weak position, Finance Minister Michael Noonan insisted he has no actual legal powers to allow him to act.

However, Mr Noonan is expected to meet with the Central Bank governor today to discuss the issue.

“I will again speak to the governor of the Central Bank and ask the bank to see what influence they can bring to bear, to bring the variable mortgage rates closer to the cost of funds,” said Mr Noonan.

Variable rates here are more than double those charged elsewhere in the eurozone.

The gap in what is being charged means that a family with 20 years left to pay on a €200,000 mortgage, on a variable rate, is paying €4,000 more a year than a family with a tracker owing the same amount.

And the rates being charged to new mortgage customers are €600-a-year less than to existing variable rate mortgage payers.

 

 

 

 

 

#Thrifty Thursday- Online Billing

Utility companies have been accused of “fleecing” their customers by charging them for paper billing.

And there have been calls for An Post branches to put systems in place to help people who are missing out on savings of hundreds of euro a year because they do not use the internet to pay bills. Research has found those who do not use websites to get the best deals are losing out on savings of up to €400 a year.

Almost one in five adults do not use the web, according to the Central Statistics Office, and utility firms reserve their best deals for those prepared to make transactions online and switch from getting a bill in the post to online billing. One TV and broadband supplier, UPC, charges €42 a year for issuing postal bills. Insurance firms offer discounts of up to 20pc for families prepared to use the web to conduct business, with mobile phone, energy companies and banks all offering the best deals for online transactions.

Our Thrifty Thursday advice is ‘Don’t get fleeced’, many utility firms will use any opportunity to add on extra charges to loyal customers. So, until there is some reform to this area of unfair charges- get wise and get online!