Local td welcomes new mortgage rules

Fine Gael Longford/Westmeath TD, Gabrielle McFadden, has welcomed the Central Bank’s recognition of the financial pressures faced by young house hunters by not proceeding with a prohibitive 20% mortgage deposit proposal for first time buyers.

“After much outcry, including my own concerns which I have expressed publicly, I am pleased the Central Bank has had a substantial rethink of the 20% deposit proposal.

“Thankfully, the revised mortgage lending rules, to be approved by the Oireachtas, will mean first time buyers will have to provide a more affordable 10% deposit for a house, valued up to €220,000. A further 20% deposit will be required for any amount above this price”.

She continues: “It is not the perfect solution, especially for young people looking to buy in Dublin, but should help people looking for a home in Midlands where, thankfully, prices are lower. The revised rules will offer a welcome reprieve for first time buyers and I would like to commend Governor Patrick Honohan and his team who have accepted the glaring need to give young people a decent opportunity to buy their own home”.

Remarks made last week by Governor Honohan did suggest that the thinking was very much in favour of introducing a 20% deposit rule. Thankfully, the affordability factor is at the heart of the new rules, to the relief of many, the Longford/Westmeath TD says.

“Under the new rules to be introduced shortly for first time buyers, if we take the example of a person or young couple who want to buy a house for €150,000, they will need to provide a deposit of €15,000, half of what would have been required under the initial 20% proposal.

Of course, none of us want to go back to the days of the property bubble created under the last Government and I welcome the fact that the Central Bank is retaining the 70% loan to value limit for buy-to-let loans.

“However, if the initial 20% proposal had gone ahead for first time buyers, it would have put buying a house beyond the affordability of many young people. Thankfully, common sense has prevailed to the benefit of first time buyers dreaming of securing their first home,” concludes Deputy McFadden.