McEntee expresses concern at potential impact of Central Bank’s proposed 20% mortgage savings requirement

Fine Gael TD for Meath East, Helen McEntee, has expressed her concern about the impact that proposed Central Bank changes to mortgage lending requirements would have on young people trying to buy a home. The Central Bank has proposed that potential homebuyers should be able to come up with 20% of the cost of a property in order to qualify for a mortgage. Deputy McEntee also welcomed the statement by An Taoiseach, Enda Kenny TD, that the Oireachtas Finance Committee is to  prepare a report on access to credit for first time buyers, including examining the feasibility of a “mortgage insurance” scheme.

“As a 28 year old who is like most people hoping to buy or build a property at some stage in the future, I am very concerned about the impact that the Central Bank’s proposed changes to mortgage lending requirements will have on the ability of individuals and young families to qualify for a mortgage. 

“I believe that the 20% rate which is being recommended by the Central Bank is too high and will unduly exclude many credit-worthy potential homebuyers from buying a home. I believe that the rate should be between 10% and 15% and that other criteria such as income should be factored into the deliberations.

“The Central Bank needs to find a balance between facilitating home ownership for credit-worthy individuals and families, and allowing the banks to become overburdened with debt which it cannot sustain.

“I am deeply aware of the concerns about a property bubble, especially in Dublin and surrounding counties such as Meath where demand and prices for homes have increased acutely in the past year. The increased property prices are putting more pressure on potential homebuyers to come up with money. Making these people raise 20% of the cost of a home will exclude tens of thousands of people from the fundamental aspiration of home ownership and will ensure that many have to rent their accommodation for an unduly long period of time.

“I have spoken to people who are currently house hunting and it is extremely hard for them to compete with the very high numbers of people, as high as fifty, who turn up to viewings. Houses are being sold for significantly higher than the price that they are put on the market for.  The Central Bank needs to arrive at a recommendation which will protect the banks from getting into difficulty. Equally, they need to enable people to buy homes in a sustainable and affordable manner.

“I will also be making recommendations on the issue as part of the public consultation being undertaken by the Central Bank.”