Kenny critical of mortgages crackdown

The Central Bank’s proposed tough crackdown on low-deposit mortgages appears to have come under fire from Taoiseach Enda Kenny.

Mr Kenny used a conference on housing and property to stress that home ownership needs to remain an “attainable ambition” for young, “credit-worthy families”.

The comments were seen by some as a reproach to recent Central Bank plans to cap most mortgages at 80%, with buyers needing to have saved a 20% deposit.

The initiative has caused concern that it may price younger people out of the housing market, and the Central Bank is holding consultations on the move ahead of its planned introduction in January.

Mr Kenny spelled out wider social consequences if young people were denied a foot on the property ladder.

“Without access to mortgage credit, young families will place increasing demand on the rental and social housing markets,” the Taoiseach said.

Mr Kenny also reiterated that the Government is still considering a controversial State-backed deposit scheme, whereby tax-payers could underwrite a 5% deposit for first-time buyers in a move similar to schemes operating in Britain and Canada.

Mr Kenny also used his address to the property conference to insist that repeats of developer disasters like Priory Hall would not be tolerated in the future.

“In rebuilding a construction sector based on excellence and quality, we have to stand up and confront the major deficiencies in the sector that tolerated poor stand-ards through a weak regulatory and enforcement regime.

“We will not tolerate any more Priory Halls or pyrite housing estates.”

The Taoiseach said that reviving the construction sector was a key driving of economic growth, but a return to boom and bust must be avoided.

“A big part of the Government’s recovery plan is to support a sustainable recovery in the construction sector,” he said.

“The spectacular crash in the sector has caused widespread hardship and ruin for many and acted as a drag on the economy,” he said.

“Nobody wants to go back to the bad old days of the construction and property boom.

“That won’t benefit the country, young families or the sector itself.”