Survey reveals 7 out of 10 are impacted by mortgage rules ahead of Central Bank review

Survey reveals 7 out of 10 are impacted by mortgage rules ahead of Central Bank review

The Central Bank mortgage rules have been in place for almost a year and a half now but still their impact divides opinion.

Many people looking to buy are unable to meet the rules that they must have at least a 10% deposit due to the length of time it takes to save such an amount at a time when many are paying exorbitant rental costs.

A new survey this week revealed that seven out of 10 new buyers said they were affected by the Central Bank rules.

The survey, was commissioned by the Irish Brokers Association, the Banking and Payments Federation, Ibec’s Property Industry Ireland, the Society of Chartered Surveyors, the Construction Industry Federation, IPAV and estate agencies including DNG, and others and found that the rules were hampering people’s bid to buy a home.

It revealed that four out of 10 will have to borrow from family and friends to get a deposit together while those saving estimate it will take up to six years to get enough money together for a deposit.

Up to a quarter of those planning to buy had already factored in some form of gift from a relative or friend in helping them meet the requirements while 52% had excluded the area where they want to live from their search because they simply cannot afford it.

It also revealed that six out of 10 would-be buyers are paying high rents while trying to save.

It comes at a time that the average first-time buyer is having to come up with a deposit of €61,000 for a home with critics of the rules suggesting that only those with rich parents are now able to buy.

The survey was undertaken to form part of a submission to the Central Bank’s forthcoming review of the rules.

It will be interesting to see what, if any, changes are made to the system.

What is your opinion on the rules?

  • Do they work?
  • Are alterations needed?
  • Have they hampered you or someone you know?

Have your say below…

There are 11 comments for this article
  1. Michael at 5:03 pm

    Typical Banks and Government go to bed together and get up together. Perhaps some sort of survey needs to be done just to see the amount of Bankers and Government Officials who have property in the Rental section. Secondly why is it that people who have mortgage repayments still have to pay Property Tax. I was under the opinion that the owners of the property pay the tax so why are the Banks not paying. Withhold your repayments and see just who owns your property. A great little country this 4.5 Million, a third of the population of London and just 150 miles wide by 300 miles long and successive governments make a dogs meal of it. Am I alone in thinking this way?


  2. JL at 2:20 pm

    The whole system is bullshit we were lucky enough to buy but not as a couple my partner had to go as a single man he lied and said he had no children or partner we borrowed from our parents a large amount and now are crippled paying back a credit union loan to pay our parents back. We can not afford to buy simple things like clothes for ourselves and have to go around the shops calculating how much our shopping is going to be. I know at least we have our home now but why are working class people forced to live in such a hard way just to have a roof over our head.

  3. Kevin at 6:59 pm

    The simple fact is that some people will never be able to afford to buy a house. If you cannot afford to raise a deposit the solution is not to relax the lending rules.

    Right now the market prices are relatively stable. By changing lending rules the only thing that happens is you flood more money into the market. The number of houses remain the same, just more people can afford to bid. It is simple economics, the price rise. So the only result of lifting rules is an ever increasing spiral of house prices. The people who cannot afford to buy now will still not be able to afford to buy, and everyone else will pay more. Only benefactors are the estate agents and developers sitting on land banks.

    The solution is more housing, if there is more houses in desirable areas then the prices come down and people can buy within existing sensible leading ratios.

    The alternative is a return to the pre recession madness.

    • Robert at 3:32 am

      You say some, some generally means a few and current statistics are showing that 70% and more cannot afford to buy a home because of the financial restrictions imposed so therefore I do not agree with your comments.

    • Robert at 3:39 am

      Easing the Central Bank restrictions somewhat is not advocating a return to pre recession madness as you maintain, it is giving those who can afford to purchase a better chance and start in life.

  4. Robert at 2:12 pm

    These restrictions should be eased now that the economy has taken a turn. The Central Bank rules are stifling development in the construction industry not to mention the addition of home furnishings and the retail sector in general. Thousands of jobs across all trades including electricians, plumbers, joiners, roofers and bricklayers could be created producing much needed income to the Irish exchequer. Central Bank rules are stifling growth in the economy and need to be relaxed.

    • Kevin at 7:14 pm

      Development is not stifled. Developers are not building because they are trying to reduce supply and increase prices. There are plenty of buyers, but the price in the market is still too high. It is greed. Build more houses and sell them for less.

      • Robert at 3:35 am

        Everyone gets out of bed in the morning to make a profit, what are you suggesting, that builders build house for free, or worse, at a loss ? You wouldn’t go to work everyday if it cost you more than you were earning.

  5. Someone at 1:55 pm

    If it takes six years to get enough money for a deposit, how long do people intend to live to pay the mortgage back? 150 years?

  6. Rosalie B at 1:53 pm

    The core issue here is that, even if we are stating we will get part of the deposit as a gift, banks are not willing to lend to first time buyers… We applied with BOI and got refused on account that my partner is not yet on his permanent contract as a secondary school teacher – purely because there is a backlog that was not processed in time for our application for house hunter mortgage pre-approval. Plus if they do lend, the mortgage rates are way higher than in most other EU states, making the repayments harder on the buyers…

    We were forced to bail out the banks with our tax money and this is the thanks we get for it…

    • Paul Sullivan at 2:03 pm

      Rosalie, you are quite correct the banks in Ireland have always been lazy and parochial. Years ago when we idealistically wanted to nationalise them, we failed to anticipate that even when ostensibly nationalised as they are now (taxpayer bail out) they would remain so uniformly inefficient.

      There are answers in other countries where a state lending system for mortgages which can draw on Government bond level borrowings actually provide many mortgages. The failure of the main banks in Ireland to either learn from previous experience (property bubbles) or update their thinking on customer focus points towards the need for an alternative mortgage lending system.


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