Business News in Brief: New mortgage rules will prevent housing bubbles

In other news, DR and Prince Joachim have been seeking to solve their cashflow problems

Oct 30, 2017

Lars Krull, a banking expert attached to Aalborg University, has warned that new mortgage rules, which will officially come into play from January 1 next year, will hit potential buyers in the large cities the hardest – predominantly because property prices are higher there.

From next year, the number of mortgages available to families seeking to borrow more than four times their household income, or more than 60 percent of the value of the property, will be heavily restricted. Their only practical option will be a fixed-rate loan.

Previous proposal quickly dropped
Brian Mikkelsen, the business minister, recently dropped a previous proposal that would have placed a geographical restriction on variable, floating rate, short term and restricted repayment loans, which have been popular with first-time buyers over the last two decades.

“These are reasonable guidelines that should ensure that homeowners are more robust,” contended Krull. Ane Arnth Jensen, the deputy CEO at Finans Danmark, concurred that the “clear and simple rules” will help “prevent housing bubbles”.

Government to help DR with liquidity problems
DR has cashflow problems due to decreasing revenue from licence payments, according to a report on the national broadcaster’s website, and is accordingly asking Parliament for half a billion kroner in collateral to tide it over. The liquidity is not needed for program production, explained its chief executive, Niels Ammitzbøll, but merely to keep the cash register ticking over. It is estimated DR will need 300 million a year in the future to make up for the shortfall, which has been partly caused by SKAT’s ineffective new method of collecting the licence fee.

Danish postal workers deprived of board rep
The departure of Lars Chemnitz, a manager at the trade union 3F, from the board of Postnord, the parent company of Post Danmark, means Danish postal workers no longer have a representative, despite the announcement that 6,000 of them will shortly lose their jobs. The decision to replace Chemnitz with a representative from 3F’s Swedish sister federation, Seko Posten, was apparently a sudden one. Meanwhile, in related news it has been confirmed that the amount of post sent in Denmark declined by 21 percent in the third quarter of 2017 compared to the same period last year.

Not so much of the Farmer Joachim anymore
Prince Joachim’s agricultural ties have been further reduced by his decision to sell a sizeable stake in the property agency that oversees the interests of Schackenborg, the stately home he sold in 2014, and four others. The buyer of the prince’s 10-15 percent chunk in De 5 Gaarde, which is currently operating at a loss, is the same purchaser of Joachim’s former pad: the Schackenborg Fonde, a fund backed by the owners of Danfoss, Ecco and Lego. Joachim now owns 20-25 percent of De 5 Gaarde.

Concerns expressed over Apple Pay adoption
Henrik Hyltoft, the marketing director at Dansk Erhverv, has warned that if the recently-launched mobile pay system Apple Pay proves popular with consumers using it from the comfort of their home, it will ultimately cost them more on the high street. Stores will be forced to raise prices to cover the fees involved in using the card, which is not compatible with the Dankort and instead conducts its payments via Visa. Apple Pay can be used at any store that accepts foreign cards.