Morning business news - December 9Monday 09 December 2013 14.43
PERMANENT TSB FOCUSES NEW PRODUCTS ON INVESTORS - Permanent TSB has rejected suggestions that it is squeezing family home buyers out of the market by launching a range of new products aimed at the buy-to-let sector. The bank is offering a range of products with interest rates based on the size of the deposit that the buyer is bringing to the transaction. It is also offering a new product to Irish people living overseas who wish to invest in property here.
Ger Mitchell, Head of Mortgages with Permanent TSB, said investors were looking for a very different type of property to the type being sought by those looking to purchase a family home.
"Investors are already active in the market. There's a very healthy rental market with 470,000 people in rental accommodation at the moment. Investors are typically looking at purchasing apartments or duplexes," he said. He acknowledged that there would be a cohort of overseas buyers who would look to purchase family homes with a view to coming back to live here.
Mr Mitchell rejected suggestions that the bank was adding to the mortgage arrears problem, which is most acute in the buy-to-let sector. "This has been a significant problem for people who bought at the top of the market, but there has been a considerable correction in house prices. There are a lot of suitable properties for investment available at a suitable price."
MORNING BRIEFS - The recovery in the construction sector is continuing to gain traction, according to the latest Construction Purchasing Managers Index from Ulster Bank. There was a third month of jobs growth in the sector in November. A strong growth in activity and new orders was also registered in the month, while business sentiment was at its highest since the survey began in 2000.
*** HSBC Bank is reportedly considering floating up to 30% of its British retail and commercial banking arm. The move would help the bank adhere to planned new rules demanding that British banks ringfence their retail arms or face a breakup of the company. The Financial Times said the plan was at an early stage but it had been discussed with investors and informally at board level. It is understood the business could float with a market capitalisation of about £20 billion.
*** The $11 billion merger of American Airlines and US Airways is set to be signed off on today. The process will end a series of legal and regulatory hurdles, including a last-minute appeal to the US Supreme Court that was rejected on Saturday. That came from a consumer group which argued that the merger would lead to higher airfare and fewer choices for passengers.
*** Insurance group Aon is to create 30 high skilled jobs at its centre for Innovation and Analytics in Dublin. The centre provides advanced insurance research, analytics and business intelligence for the wider group and to its clients. The centre - which was opened in 2008 - employs 100 people already. The project is supported by the Department of Jobs through the IDA Ireland.