"It was a luxury house in a good area, but it was on the market at £695,000 so David Callaghan, 43, reckoned that after negotiating hard to bring it down to £650,000 he had landed a bargain. The property market was roaring away and he was convinced the price would be £750,000 in a year’s time. So he cobbled together the money, stretching himself to the limit with a huge £485,000 mortgage, plus his deposit.
But this was autumn 2007, and this was Northern Ireland. For a brief moment in time a province that was a byword for violence transformed itself into the world’s most sizzling property market. Builders who were knocking out small estates of semis initially priced at £120,000 were selling them for £200,000 on completion six months later. Investors from the Celtic Tiger south were driving north and snapping up anything they could lay their hands on. Banks were falling over themselves to lend.
To Callaghan, and thousands of others like him, it made sense to take the largest mortgage possible. He even managed to borrow some other cash and invested in a one-bed buy-to-let in Belfast.
Then the financial hurricane struck, and with peculiar ferocity in Northern Ireland. Where David bought, just outside Newry, midway between Belfast and Dublin, is perhaps the part of the UK that has suffered the biggest property boom and bust ever recorded. In March, David put the house on the market and it eventually fetched just £240,000 – resulting in a loss of £410,000.
“We’ve been wiped out,” says Callaghan, who is married with two young children. “We gathered everything together we could and sold it. We’ve sold our car, we’ve sold everything – and managed to get £17,000. So the bank has taken that, as well as the £240,000, and we now have nothing.”
He had to sell because his income has fallen heavily since 2007 and he has been struggling to pay the mortgage and childcare. “I was getting ill with it, and my wife was stressed and it was affecting our marriage. It was hanging over us like a cancer. I was having to borrow from her dad. Now we’re renting, and are much, much happier. I feel like I’ve got out of jail.” The buy-to-let in Belfast has also gone, but it wasn’t as bad an investment as the house in Newry. It only fell in value by half, not two thirds.
Claire Dempsey is another victim. She was a single woman in her mid-20s earning not much more than £20,000 a year when, in 2006, her bank offered her an interest-only loan of eight times her income. She scraped together another £23,000 from her savings and from her parents to buy a small semi for a total of £183,000. After falling pregnant and being unable to maintain the mortgage, she eventually sold it for just £65,000."
Source: Towns the UK property boom forgot:
But this was autumn 2007, and this was Northern Ireland. For a brief moment in time a province that was a byword for violence transformed itself into the world’s most sizzling property market. Builders who were knocking out small estates of semis initially priced at £120,000 were selling them for £200,000 on completion six months later. Investors from the Celtic Tiger south were driving north and snapping up anything they could lay their hands on. Banks were falling over themselves to lend.
To Callaghan, and thousands of others like him, it made sense to take the largest mortgage possible. He even managed to borrow some other cash and invested in a one-bed buy-to-let in Belfast.
Then the financial hurricane struck, and with peculiar ferocity in Northern Ireland. Where David bought, just outside Newry, midway between Belfast and Dublin, is perhaps the part of the UK that has suffered the biggest property boom and bust ever recorded. In March, David put the house on the market and it eventually fetched just £240,000 – resulting in a loss of £410,000.
“We’ve been wiped out,” says Callaghan, who is married with two young children. “We gathered everything together we could and sold it. We’ve sold our car, we’ve sold everything – and managed to get £17,000. So the bank has taken that, as well as the £240,000, and we now have nothing.”
He had to sell because his income has fallen heavily since 2007 and he has been struggling to pay the mortgage and childcare. “I was getting ill with it, and my wife was stressed and it was affecting our marriage. It was hanging over us like a cancer. I was having to borrow from her dad. Now we’re renting, and are much, much happier. I feel like I’ve got out of jail.” The buy-to-let in Belfast has also gone, but it wasn’t as bad an investment as the house in Newry. It only fell in value by half, not two thirds.
Claire Dempsey is another victim. She was a single woman in her mid-20s earning not much more than £20,000 a year when, in 2006, her bank offered her an interest-only loan of eight times her income. She scraped together another £23,000 from her savings and from her parents to buy a small semi for a total of £183,000. After falling pregnant and being unable to maintain the mortgage, she eventually sold it for just £65,000."
Source: Towns the UK property boom forgot:
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