‘Rules will stop another housing bubble’

The new rules for mortgage lending will have less of an impact on the property market than “people might think”, according to the governor of the Central Bank, Patrick Honohan, who said their aim was to prevent another housing bubble from forming.

Only a quarter of first-time buyers in 2014 would have been affected by the new mortgage lending rules and 80% of these would only have had to increase their deposit by a maximum of 3%, he said.

Mr Honohan was speaking yesterday following the release of the Central Bank’s new rules on mortgage lending. In a concession from the original proposal, first-time buyers will only have to stump up a 10% deposit for the first €220,000 of a mortgage and 20% for the balance. All other house buyers will be subject to a 20% deposit and a 30% deposit for buy-to-let mortgages. Lending will be capped at a maximum of three and a half times’ salary.