Fianna Fáil: More families will suffer over mortgage rules
The bank’s deputy governor, Sharon Doherty, has strongly hinted the 20% deposit rule and other restrictions on mortgages will not be changed when a review is published in November.
Meanwhile, controversial plans to fast-track large- scale house builds are set to be discussed by Cabinet today, alongside separate measures to prevent tenants from losing their homes if a firm buys their estate.
Under measures put forward by Housing Minister Simon Coveney, developers building 100-unit estates will be able to do so after a 16- to 24-week planning process instead of the current 18-month to two-year timeline.
The bill will include plans to block firms which buy 20-unit estates from removing existing tenants who cannot pay increased rents until after their tenancy runs out, effectively preventing a repeat of the Tyrrlestown controversy earlier this year.
At the weekend, Ms Doherty said it would be “unwise to seek to adjust the rules” around mortgages.
Michael McGrath, the Fianna Fáil finance spokesman, yesterday said the rules are “undoubtedly having a negative effect” on the ability of buyers to get on the property ladder and are also denying many families the opportunity to trade up.
Under the Central Bank rules introduced in January 2015, first-time buyers need a 10% deposit for the first €220,000 of a property price and 20% for the balance. All other buyers must have a 20% deposit in place.
The Central Bank also stipulated that institutions can only only lend three-and-a-half times the income of applicants.
Groups representing mortgage brokers, the construction industry as well as the banking sector have all criticised the plans which are currently under review.
Mr McGrath said the Central Bank must be open to change as the current rules are putting home ownership “beyond the reach of many thousands of potential first time buyers, especially those trapped paying massive rents”.
