Industry Group Claims Home Ownership Is Blocked By Mortgage Rules



According to the Institute of Professional Auctioneers and Appraisers (IPAV), the Central Bank’s mortgage lending rules “effectively block access to the housing market for middle-income individuals.”

The preliminary budget document says the rules should be “tweaked” to allow those earning up to € 60,000 to borrow 4.5 times more than 3.5 times.

This would make the market fairer and “give hope to a large cohort of the younger generation,” the report said.

“It is now clear that current regulations are effectively preventing middle-income people from entering the home ownership market,” said IPAV’s chief economist. Jim Power said.


“With historically low mortgage interest rates, potential middle-income and even relatively high-income buyers in some parts of the country are unable to claim home ownership and are forced to enter a rental market that is expensive and dysfunctional. right, ”he said.

The Central Bank’s mortgage measures limit lending to most borrowers to 3.5x income or, in the case of secondary buyers, prevent them from borrowing more than 80% of the value of real estate.

This limits purchasing power in cities like Dublin, where average prices are many times higher than average income.

Some industry bodies have complained that the rules are too strict, but the regulator insists that they exist to protect society from a new credit bubble and have limited the scope of house price increases since they were introduced in 2015.

IPAV submissions argue that mortgage lending rules are prudent and prudent, but adjustments are required when the rules have negative unintended consequences.

“From an equity and fairness perspective, restricting high-income home ownership in many parts of the country is unacceptable and sustainable,” the statement said.

“Promoting homeownership for young people seeking to become homeowners will remove pressure from the rental market by vacating rental properties, lowering rents and easing growing pressure on Housing Assistance (HAP),” it said.


In a statement, the industry body also said long-term fixed-rate mortgages should become the norm to protect borrowers from short-term interest rate volatility.

“For a while, it was cheaper to service mortgages than paying rent for similar properties,” said IPAV’s chief executive. Pat Davitt said.

“This is true in all regions of the country, according to, and pretty much the same in many regions, with the exception of the two affluent districts of Dublin’s two boroughs, Dublin 4 and 6,” he said, noting that even in these atypical areas, service mortgages cost only a little more than paying rent.

“The increased competition in the mortgage market in recent months means that mortgages can be secured for up to 30 years at a relatively low fixed rate for the entire period of the mortgage,” he said.

“Middle-income people are not getting enough income and their future financial security is at stake,” he said.

In its submission, IPAV also proposes a new reduced VAT rate for new housing of 5 percent; strategy of bringing vacant houses to the market; creation of an annual register of vacant homes; and a mandatory building energy efficiency rating (BER) for each private home.


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