Revised lending rules a welcome reprieve for first-time buyers – McFadden

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.

“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.

“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.”