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Mortgage affordability improves slightly over last six months

In Dublin, couples require 22.6% of earnings to fund mortgage, down from 24.3%

The EBS DKM Affordability Index suggests that the proportion of disposable income required to fund a mortgage for the average first-time buyer working couple dropped to 19.5 per cent in April 2015, down from 20.6 per cent in October 2014. Photograph: Rui Vieira/PA Wire
The EBS DKM Affordability Index suggests that the proportion of disposable income required to fund a mortgage for the average first-time buyer working couple dropped to 19.5 per cent in April 2015, down from 20.6 per cent in October 2014. Photograph: Rui Vieira/PA Wire
Thu Jun 04 2015 - 01:00

Mortgage affordability has improved slightly over the last six months, according to lender EBS, which cites a decrease in house prices in the opening months of the year.

The EBS DKM Affordability Index suggests that the proportion of disposable income required to fund a mortgage for the average first-time buyer working couple dropped to 19.5 per cent in April 2015, down from 20.6 per cent in October 2014.

As might be expected, the index shows that buyers in the Dublin housing market need a bigger chunk of their pay to meet their mortgage repayments.

In Dublin, a first-time buyer couple requires 22.6 per cent of earnings to fund their mortgage, down from 24.3 per cent in October 2014.

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In Cork and Galway, the figure stands at 14.4 per cent and 13.4 per cent respectively.

Longford is the most affordable county in Ireland to buy a home, with a couple requiring only 6.9 per cent of their net income to fund their mortgage.

"With the volatile changes in house prices in the opening months of 2015, the positive and negative swings in affordability can be clearly seen," said Annette Hughes, director of DKM Economic Consultants.

“The recent upturn in house prices in March is probably not surprising given that the market continues to be characterised by pent-up demand, a supply shortage, rising rents and new lending regulations,” she said.