A senior advisory group to Taoiseach Enda Kenny has said new mortgage proposals from the Central Bank will make it difficult for first-time buyers to purchase their own homes.
The National Economic and Social Council report on home ownership and rental, published today, also says younger adults looking to set up a home near centres of employment, among other social groups, will find it far more difficult to purchase their own homes.
The report, titled Home Ownership and Rental: What Road is Ireland On?, examines housing policy in Ireland and how it may develop in the future.
It says new proposals from the Central Bank will be particularly hard on those renting in cities while saving for their own home.
80 per cent limit
While the Central Bank plan, as proposed, would limit mortgages to 80 per cent of the value of a property and impose an income limit of three and a half times salary, governor
Patrick Honohan
has indicated that certain aspects might be eased. Minister for Finance
Michael Noonan
has also said the proposals should be softened.
The report says the proposals are “likely to cause some difficulty” for first time buyers, “particularly if they have to rent accommodation in a large urban area while saving a deposit”.
“To buy a €200,000 dwelling, a first-time buyer would need to save €40,000,” it says, while adding the income limit rations “should help to sustain affordability in housing prices”.
The report also says that even though rental and property prices are increasing, “purchasing is now less expensive than renting, based on a 30-year mortgage, in most parts of the country”.
