Estate agents critical of Central Bank decision

The auctioneering representative group, IPAV, has said the Central Bank’s decision not to relax rules on borrowing will leave those on average wages unable to buy a home.

The rules – which were introduced in 2015 in an effort to prevent another bubble in the housing market – stipulate that buyers cannot borrow more than three-and-a-half times their gross income and that first-time buyers must have a minimum deposit of 10%. Second-time and subsequent buyers must have a 20% deposit.

Last week, the Central Bank completed a review of the rules and decided against making any changes.

Gabriel Makhlouf, Governor of the Central Bank of Ireland “The mortgage measures are working and because they are working, we don’t propose any changes to them.

“If the measures had not been introduced in 2015, our models suggest that both the level of house prices and the proportion of highly indebted mortgage borrowers would likely have been significantly higher in 2019 than we see, all else being equal.”

The Institute of Professional Auctioneers & Valuers (IPAV) – which represents 1,300 auctioneers around the country – said while the news was “unsurprising”, the situation left the less well-off who could well afford to make mortgage repayments in a vulnerable position.

Chief Executive Pat Davitt said: “While those on high-end salaries can afford to buy, those on average wages are in real difficulty.

He said overall the Central Bank mortgage rules play an important role.

For more, read this week’s Connacht Tribune.

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