dream home

New market research commissioned by the Irish Brokers Association ( which Money Doctor is a member), the Banking and Payments Federation, IBEC’s Property Industry Ireland, the Society of Chartered Surveyors, the Construction Industry Federation, and estate agencies including DNG and others shows that 7 out of 10 new buyers and movers say they are being affected by the Central Bank new rules and restrictions, most of them negatively.

4 out of 10 will also have to borrow from family and friends to accumulate a deposit. Those yet to start saving to buy a home expect it to take six years to get the money together for a deposit. The lending limits have proved very controversial, with claims they are making it more difficult for young borrowers in their 30s in particular to buy a home.

The survey was conducted by Behaviour and Attitudes, among 1,072 potential home buyers – those in the process or those intending to buy and forms the basis of one of the individual submissions by different groups to the Central Bank’s review of the rules.

The closing date for these submissions on a review of the lending limits is 1st September, but Central Bank Governor Philip Lane said submissions would need to be supported by “high evidential threshold” to convince him to alter the rules.

The Behaviour and Attitudes survey found :

  • That 42% say they will have to borrow from family to fund the deposit. A quarter of those intending to buy have already factored in a gift to help them buy.
  • The survey found 52% have excluded the area where they want to live as they cannot afford to buy there.
  • Some 35% of those surveyed spontaneously referenced deposit size as a negative, with an equal number referring to high prices.
  • 6 out of 10 potential first-time buyers are paying high rents while trying to save for a deposit.

“The social cost is high, with many moving away from family networks and to areas of lower amenity or infrastructural inappropriateness (poorer transport, childcare facilities, schools, roads, and further from work).” Recent Central Bank research has shown that the average first-time buyer is coming up with a deposit of €61,000 to purchase a home, up from an average of €56,000 before the lending limits kicked in. Raising a deposit of this amount is seen as beyond the capacity of most ordinary workers. Yet an average of 3,274 mortgage applications are being approved every month by the lenders.

Critics have claimed that only those with rich parents are able to buy, something the survey seems to support as 4 out of 10 are using funds from their family to get a deposit together.

More than 30 submissions have been received by the Central Bank.

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