The new Central Bank mortgage rules officially came into force yesterday with fears being expressed that it may drive up rents even further around the country.
The new regulations will see buyers forced to save deposits of 20pc of the price of a property before securing a mortgage.
First-time buyers get some reprieve as they will only have to have 10pc of the value of properties worth up to €220,000, however, the 20pc rate applies to the portion of any mortgage over that price.
That will likely 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 recently.
According to the estate agents, the average house price in the capital 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.
That type of money could take years to save, meaning more people could be forced into renting, therefore driving up demand – and therefore prices – for good quality family homes in that sector.
They will cause a wealth divide among families when it comes to housing according to Pat Devitt of IPAV.
“The rules will favour better-off families where parents have the financial strength to support their children,” he said.
“They will confine many, unwillingly, to renting for long periods, pushing up rental costs further,” he said.
- What impact do you see the new rules having?
- Would it put you off buying?
- Is it possible to save while paying ever increasing rental prices at the same time?
Have your say below…