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Central Bank told to change lending rules

Fianna Fail and Labour call for deposit cuts for first-time buyers struggling to get on ladder.

First-time buyers are being frozen out of the housing market due to high rents coupled with the massive mortgage down payments they are forced to save due to the Central Bank rules.

Young families hoping to trade-up are also being crippled by the lending conditions which mean they have to save a huge 20pc deposit on any home they hope to buy.

Fianna Fail is calling for the rate for first-time buyers to be slashed by a third if the house-buyer has a proven track record of paying rent for three years.

The party’s submission, which was prepared by Fianna Fail finance spokesman Michael McGrath, also calls for new laws which will force banks to take out insurance against losses arising from borrowers defaulting, or entering into a mortgage arrears resolution process.

The cost would be shared between the borrower and lender – the bank would add an interest rate to the loan to cover the insurance.

Plan to give landlords tax deal in return for rent freeze.

The Fr Peter McVerry Trust and Ibec’s Property Industry Ireland have joined forces to endorse a plan to allow landlords treat property tax payments as an expense – in return for giving tenants a rent break.

Landlords would “opt in” to the scheme. After two years, if the tenant produces a letter confirming that the rent did not increase, then the landlord would get the extra tax benefits.

Landlords that sign up for a two-year rent freeze would treat property tax as an expense, and get full mortgage relief when filing a tax return.Landlords can only claim 75pc of the interest they pay on a mortgage against their tax bill following a budgetary change during the economic downturn.

Fears first-time buyer grant would push up home prices.

A Labour Party proposal to introduce a cash grant scheme for first-time buyers is likely to be shot down amid fears it would cause house prices to increase further.

The measures would mean the minister directs local authorities to provide cash grants to applicants struggling to get onto the property market in cities such as Dublin, Cork, Limerick and Galway.

Dublin Central TD Joe Costello and party chairman Jack Wall said measures are needed to assist those trying to get onto the property ladder.

But senior Government sources have voiced caution over such a move, warning against any such measure that could cause house prices to escalate further.

Mr Kelly is also due to roll out a suite of measures aimed at stalling spiralling rent bills

Is it cheaper to rent or buy in Ireland?

The number of rental properties available nationwide has dropped to its lowest point since 2006, and the difference between renting and buying property in Ireland today is now being compared.

Average rents nationwide between January and March stood at just over €960 – that is 8.2% higher than at the same point last year.

Compared to their lowest point (2010 in Dublin and 2012 in the commuter counties), rents have now risen by one-third in the capital and a quarter in the surrounding areas.

In the other city centres, rents continue to rise but at a slightly slower pace. In Cork city, rents are 7.5% higher than a year previously, similar to the increase seen in Galway 7.4%. In Limerick, rents have risen by 6.8% in a year, while in Waterford city rental inflation was 5.6%.

The report also compared the cost of owning versus renting in different areas of Ireland. It found that a first time buyer on a 4.3% variable rate mortgage buying a two bed property in Dublin city centre would on average be paying €954 per month, while renting costs €1,360. In Cork the buying cost was put at €392 per month, with rents at €665.