herald

Saturday 16 December 2017

Dan White: Has my house lost 50pc in value over three years?

Dan answers your financial questions

DUE to circumstances beyond my control, I have been forced to put my house up for sale.

My auctioneer has advised me that I should price it at €395,000. This is about half the price that it would have fetched three years ago. How can this be the case?

According to the Permanent TSB house price index, house prices have fallen by 31.5pc since February 2007. Who is right, my auctioneer or the house price statistics?

DELIA

On February 22 Permanent TSB announced that it was suspending monthly publication of its house price index. According to the Permo, it wasn't issuing enough new mortgages to construct a meaningful sample for the index.

This was a reflection not just of the collapse in the level of activity in the housing market but the fact that, with its parent Irish Life & Permanent desperate to offload it, Permanent TSB has virtually stopped paying out new mortgages with the total of new loans being issued dropping by almost five-sixths from €7.1bn in 2008 to just €1.2bn last year.

Even before the Permo pulled the plug on the index, it was of only limited value because with houses taking so long to sell, it was reflecting the state of the housing market five or six months previously.

Under the Permo's new plan to publish the index quarterly -- once every three months -- this problem will get even worse.

Of course that's not much consolation to Delia. She still has a house to sell and has very little to guide her on what it might be worth.

Unfortunately the prices at which individual houses are sold aren't published by either auctioneers, the Land Registry or the Registry of Deeds.

Which means that all Delia has to go on is educated guesswork.

However, with even Construction Industry Federation boss Tom Parlon now acknowledging that house prices have fallen by 50pc the bad news is that her auctioneer is almost certainly right.

If she has to sell her house now then it is almost certain that she will get only about half the price she would have got three years ago.

I received a Hughes and Hughes gift voucher for Christmas.

Now that the chain has gone bust can I redeem this voucher?

SIMON

On February 26 a receiver was appointed to the Hughes and Hughes chain of bookshops. While Easons has taken over its Dublin Airport branches, all of its other outlets remain closed.

So where does that leave Simon and his gift voucher? The news is almost certainly not good.

As the holder of a gift voucher, Simon is an unsecured creditor of Hughes and Hughes.

What this essentially means is that he is at the back of the queue, behind the Revenue, staff and banks, when it comes to getting paid.

Hughes & Hughes owed its banks, primarily Ulster Bank, €5.8m at the end of March 2008.

The company's debts have almost certainly increased considerably over the past two years.

Simon will be lucky to receive a couple of cent in the euro on his gift voucher.

As an unsecured creditor, Simon should write to the receiver, David Carson of accountants Deloitte. He should enclose any proof of the money he is owed, ie, the gift voucher, with his letter.

The collapse of Hughes and Hughes illustrates once again the dangers of holding retailers' gift vouchers for any length of time.

These are no more than IOUs and are virtually worthless if the chain gets into financial difficulty.

The National Consumer Agency has advised consumers to redeem gift vouchers without delay. That sounds pretty sensible to me.

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