Changes to mortgage rules spark fears of rent hikes

The new Central Bank mortgage rules which came into effect last weekend have sparked fears that they may drive up rents even further around the country.

Concern was also expressed that rising rents will force more people into homelessness.

Rental prices rose by almost 10% nationwide last year, while most buyers will now have to save deposits of 20% of the price of a property before securing a mortgage.

That is expected to lead to more people staying in rented accommodation for longer, with a greater demand on already stretched housing resources.

“Our initial views are that the overall effect will lead to potential buyers renting for longer and as a consequence there will be upward pressure on rents, especially in the capital,” DNG chief executive Keith Lowe said.

According to the estate agency, the average house price in Dublin now stands at €373,981, meaning a first-time buyer would have to save just under €53,000 before applying for a mortgage for such a home, with a non-first-time buyer needing almost €75,000.

“The rules will confine many, unwillingly, to renting for long periods, pushing up rental costs further,” he said.

The Simon Communities in Ireland, meanwhile, warned that rising rents will mean that more people are being pushed into homelessness whilst many people remain stuck in emergency accommodation.

“It is inevitable that homeless services that are already stretched will see even more people knocking on their doors unless the housing crisis is addressed urgently,” said Niamh Randall, national spokesperson for the Simon Communities.