New mortgage rules will they change for 2016 and going forward??

Jen44

markpb wrote: »

Would you mind telling us the grounds for the exemption?

They were happy to do it on the grounds that the mortgage we were looking to borrow was less then 3.5 times our annual salary plus we had a tracker mortgage with a different bank which is in an area with a good rental market our mortgage on that house is 650 and the rental income is 900 euro. We took out the second mortgage completely separate from the first, its with a different bank

Santy2015

I'm 90% sure that there won't be a massive rush on houses in 2016 in my area but definitely in Dublin and the greater Dublin area if lenders are starting afresh with their allocation of exceptions to the. I'm in favour of the new rules and now know exactly what we can afford and not to go mental on price. We don't rent so savings will be our proof that we can pay and that's 1200k a month and we both have other bills already like loan,sky,car costs.i know people who bought in the boom and regret it so much. Those were the days you could borrow your deposit from the CU and then pay that back with your mortgage as I've been told. It might not be true but it was 13 years ago

johnp001

MarkAnthony wrote: »

We don't want the supply problem fixed. We want the country to continue to grow faster than we can build houses. At some point, and I concede this needs to be controlled, equilibrium will be reached that Ireland is expensive enough to be an attractive place to build (not only houses but infrastructure) but not so expensive that people can't afford to live in any profession (a la London).

Supply is not the massive issue people think it is either. Supply in certain areas is, people need to start looking in the traditionally 'less desirable' areas which has the knock on effect of bringing a higher proportion of people invested in their properties and the local community. We also need to look at building suitable and well thought out social housing and moving a proportion of people out of central Dublin areas who are never going to find (read look for in some cases) work.

When a couple on minimum wage can service a mortgage on a three bedroom house on the outskirts of the capital city I simply don't agree houses are too expensive. I grant you that other areas like Cork may have gone bonkers, I admit I don't know enough about the landscape outside of Dublin. I also concede areas of South Co. Dublin are also bonkers but frankly entering into that lunacy you deserve to get burned.

D5, D15, Areas of D3 and D7 have a long way to go before they're overpriced in my opinion.

I don't think we're actually that far apart in our opinions or sentiments and I don't wish to come across as aggressive in my opinions either. I just don't think there are any simple fixes.

I read some posts of yours on previous threads that used the comparison of Dublin prices to Oxford prices as validation that they were not overpriced.
Would you maintain that view in the light of the recent UBS Global Property Bubble Index rating of London

London is by far the most overvalued market in Europe, at risk of a bubble...

and the Lloyds bank report on the relative affordability of Oxford relative to the rest of the UK (including London)
Oxford the least affordable city to live in as houses sell for 11 times local salaries?

MarkAnthony

johnp001 wrote: »

I read some posts of yours on previous threads that used the comparison of Dublin prices to Oxford prices as validation that they were not overpriced.
Would you maintain that view in the light of the recent UBS Global Property Bubble Index rating of London
and the Lloyds bank report on the relative affordability of Oxford relative to the rest of the UK (including London)
Oxford the least affordable city to live in as houses sell for 11 times local salaries?

You read the other threads comparing a number of different UK cities and the valid points raised in regard to the £, € skewing the comparison so we went and looked at other European countries?

Did you read the posts where we then looked at afforability in Dublin for a given salary range?

Did you read the point above in this very thread about NOT wanting a situation like the one they have in London?

Incidently, the answers to those questions might be better placed in the threads in question.

johnp001

MarkAnthony wrote: »

You read the other threads comparing a number of different UK cities and the valid points raised in regard to the £, € skewing the comparison so we went and looked at other European countries?

Did you read the posts where we then looked at afforability in Dublin for a given salary range?

Did you read the point above in this very thread about NOT wanting a situation like the one they have in London?

Incidently, the answers to those questions might be better placed in the threads in question.

Yes I did.
I would still be interested in your opinion on whether Oxford is a valid comparator for relative affordability in light of the London property bubble identified in the UBS report.

MarkAnthony

johnp001 wrote: »

Yes I did.
I would still be interested in your opinion on whether Oxford is a valid comparator for relative affordability in light of the London property bubble identified in the UBS report.

Feel free to ask on the appropriate thread then.

Sono

when wil the new rules be announced and come into affect does anyone know?

Santy2015

Sono wrote: »

when wil the new rules be announced and come into affect does anyone know?

Add your reply here.
They're already in affect. Since the start of 2015

TheDoc

This will very much be a big issue come general election, so you can bet your bollox pressure will be exerted on the Central Bank, and politicians will be staking their claims.

For people in my situation, young families with a single source of income, our home ownership prospects were wiped out overnight. And now we are subject to spiraling rents. I've a pretty good salary but am only a single source of income, so there is literally no chance I can meet these new criteria. Yet I've a history of paying rent for a number of years, at a rate much higher then most mortgages. If I could turn back the clock, I'd go straight into buying a house, but then who could see such a massive shift in criteria.

I'd say at some point the parameters will shift and the minute they do I'm buying. I'm pretty much getting approval across the board to any banks I speak to, but there just isn't any wiggle room in terms of the deposit fees.

My bracket if you want to call it that, of the electorate, are the ones politicians LOVE to twist the emotional screw into to garnish support. Normally I see through it, but I'll be happy to listen to potential candidates and how they plan to provide home ownership opportunities to a family like mine.

I Am The Law

TheDoc wrote: »

This will very much be a big issue come general election, so you can bet your bollox pressure will be exerted on the Central Bank, and politicians will be staking their claims.

For people in my situation, young families with a single source of income, our home ownership prospects were wiped out overnight. And now we are subject to spiraling rents. I've a pretty good salary but am only a single source of income, so there is literally no chance I can meet these new criteria. Yet I've a history of paying rent for a number of years, at a rate much higher then most mortgages. If I could turn back the clock, I'd go straight into buying a house, but then who could see such a massive shift in criteria.

I'd say at some point the parameters will shift and the minute they do I'm buying. I'm pretty much getting approval across the board to any banks I speak to, but there just isn't any wiggle room in terms of the deposit fees.

My bracket if you want to call it that, of the electorate, are the ones politicians LOVE to twist the emotional screw into to garnish support. Normally I see through it, but I'll be happy to listen to potential candidates and how they plan to provide home ownership opportunities to a family like mine.

I understand your frustration being in a similar position myself. I would like to add that the deposit you require is a percentage of unrealistic asking prices a left over from the so called boom. I can only surmise that the CB know this and are waiting for the penny to drop with those holding their properties waiting for a return to boom time prices. Sticky one for government too but IMO it’s now clear that government do not expect the banks to entirely pick up the tab for the boom years and are happy to pass the losses on to those who bought at high prices back then.
Unfortunately for you and me that leads to a very tight supply of houses for the moment at least. However keep in mind that if prices become lower then so is your deposit making it possible for ordinary families to own their home.

CageWager

People bemoaning the financial meltdown from c. 2008-2013:

"Isn't it a disgrace how the politicians, builders and bankers conspired to force us to take out 100% mortgages to buy overvalued shoeboxes and now we are crippled with negative equity"

People bemoaning the ability to purchase property in Ireland c. 2015:

"Isn't it a disgrace how the politicians, builders and bankers have conspired to only allow us an 80% mortgage, I can't get on the ladder".

The new rules are drastic and IMO they will be eased over the next 5 years as supply increases but something needed to be done as people were back sleepwalking straight into the financial abyss just as they did 10 years ago. It seems Irish people have a significant emotional blind spot when it comes to property and I think these rules, while difficult to swallow in the short term, are a necessary evil.

highly1111

I heard last week that apparently 98% of the 2016 allocation of exemptions for the 10% deposit allowance have already been allocated as rollover from 2015 for Bank of Ireland. People who applied in 2015 but who were asked to defer drawing down until 2016. I sincerely hope this is BS. Heard it from someone dealing with a broker in BOI.

We're another family stuck in the middle. Have about 40k saved. Currently paying €2 in rent. Live and work and schools in South County Dublin - f'd if we need 20% deposit. Have paid a full mortgage in 11 years - never missed a payment. Moved out of the apartment when I got pregnant with number 2 into a house where we're now renting. Full permanent pensionable jobs (I'm public sector too!) - I know its all very well for people to say "well move out of South Dublin" but its not as easy as that - we'd be looking at massive commutes if we moved and a drastic reduction in quality of live in terms of family support / friends etc. We spoke to the bank and have been clearing the stressed amounts for months now - the deposit is what's holding us back. They told us to come back in 2016 when they'd a fresh loan book - and then I heard the above.....

TheDoc

CageWager wrote: »

People bemoaning the financial meltdown from c. 2008-2013:

"Isn't it a disgrace how the politicians, builders and bankers conspired to force us to take out 100% mortgages to buy overvalued shoeboxes and now we are crippled with negative equity"

People bemoaning the ability to purchase property in Ireland c. 2015:

"Isn't it a disgrace how the politicians, builders and bankers have conspired to only allow us an 80% mortgage, I can't get on the ladder".

The new rules are drastic and IMO they will be eased over the next 5 years as supply increases but something needed to be done as people were back sleepwalking straight into the financial abyss just as they did 10 years ago. It seems Irish people have a significant emotional blind spot when it comes to property and I think these rules, while difficult to swallow in the short term, are a necessary evil.

This issue is multifaceted, and seems to contain a lot of myths if I'm honest.

While the central banks measure were required, their reaction was extreme. And it simply did not factor in that large quantities of properties here in the last 2 years have been bought, again, by speculators and foreign investment. It's substantial enough also that I'd have expected some form of assistance from the government for first time buyers, to try remove portions of the young families from the rental sector into an opportunity of home ownership. Totally understand free markets, I'm very much in favour of them, but there is simply no competing with large hedge funds and investors snapping up property and who can blow the asking price out of the water, with cash, and no messing with solicitors or mortgages.

I'd also mention that I have no sympathy unfortunately for those that took out excessive mortgages and then found themselves in dire situations. I agree with you in terms of irish people having a blindspot, but worse is how they look to point the finger.

It annoys me greatly as someone who has been financially sound and calculated from an early age, to the point where a bank should look at me as minimal risk, and yet I've been marginalised.

I appreciate something had to be done, I just hate when the brush comes out and tars everyone, regardless of differing circumstances. I'm now at the point where I need to just wait for a lapse in the regulations to then put my foot on the ladder. I really get annoyed with myself for not being riskier and just getting a house all those years ago. I figured it would be better to rent, other half and myself get comfy living with each other, and then we would have an idea about what we would want for a house. Weekly I read stories about families who were just wreckless in their decision making, getting leeway all over the place and politicians giving them all the sympathy in the world to try force the banks hand in giving them a break. So it's frustrating from my point of view sitting here where my home ownership was struck out overnight, and being perfectly capable of servicing a mortage, I'm instead forced into an inflated rental market that eats into a larger chunk of disposable income, and ensures that I can't save away to meet these new requirements.

Very frustrating situation that I didn't think someone in my position of employment would be in(that's not to be elitist or anything, it's just something that gets pointed out to me a lot)

TheDoc

highly1111 wrote: »

I heard last week that apparently 98% of the 2016 allocation of exemptions for the 10% deposit allowance have already been allocated as rollover from 2015 for Bank of Ireland. People who applied in 2015 but who were asked to defer drawing down until 2016. I sincerely hope this is BS. Heard it from someone dealing with a broker in BOI.

We're another family stuck in the middle. Have about 40k saved. Currently paying €2 in rent. Live and work and schools in South County Dublin - f'd if we need 20% deposit. Have paid a full mortgage in 11 years - never missed a payment. Moved out of the apartment when I got pregnant with number 2 into a house where we're now renting. Full permanent pensionable jobs (I'm public sector too!) - I know its all very well for people to say "well move out of South Dublin" but its not as easy as that - we'd be looking at massive commutes if we moved and a drastic reduction in quality of live in terms of family support / friends etc. We spoke to the bank and have been clearing the stressed amounts for months now - the deposit is what's holding us back. They told us to come back in 2016 when they'd a fresh loan book - and then I heard the above.....

You know the gas thing for me, in North Dublin,is there is plenty of properties about that are going for a really good rate.

I'm keeping tabs on some of the commuter counties like Kildare and Meath etc. but there is what appears to be plenty of properties going around my area, for affordable pricing. It hasn't really hit bat **** crazy yet. I've had some constructive conversations with a few banks, basically just chancing my arm to see if I could get some leeway, and they were pretty clear in terms of where my problem lies : /

I agree with you also in terms of location. While I could understand that argument being used for social housing( being picky about location) there is a difference I think when buying your own property, making a 250-300k outlay, that you want to live somewhere you actually want to live

OfflerCrocGod

TheDoc wrote: »

You know the gas thing for me, in North Dublin,is there is plenty of properties about that are going for a really good rate.

Brand new, A3 rated, 3 bed for €200K http://www.myhome.ie/residential/brochure/hampton-gardens-naul-road-balbriggan-county-dublin/3405803 if you have a good wage, as you claim, this should be no bother at all. €20K for a first time buyer deposit which should also be quite achievable.

I Am The Law

CageWager wrote: »

People bemoaning the financial meltdown from c. 2008-2013:

"Isn't it a disgrace how the politicians, builders and bankers conspired to force us to take out 100% mortgages to buy overvalued shoeboxes and now we are crippled with negative equity"

People bemoaning the ability to purchase property in Ireland c. 2015:

"Isn't it a disgrace how the politicians, builders and bankers have conspired to only allow us an 80% mortgage, I can't get on the ladder".

The new rules are drastic and IMO they will be eased over the next 5 years as supply increases but something needed to be done as people were back sleepwalking straight into the financial abyss just as they did 10 years ago. It seems Irish people have a significant emotional blind spot when it comes to property and I think these rules, while difficult to swallow in the short term, are a necessary evil.

IMO not unless prices become realistic which means saving for deposits and mortgage repayments are realistic relative to the income of families.

bleary

highly1111 wrote: »

I sincerely hope this is BS. Heard it from someone dealing with a broker in BOI.

BOI don't deal with brokers
In any case people are not stuck there is leeway. 30% of borrowers will get an exemption on either loan /income multiple or on the deposit.
Unfortunately (for you at least) that requires 70% of borrowers to fit the rules.
This should not be a problem and till circa 2000 this wasn't an issue when banks implemented the same rules (with lots of grumbling from borrowers).
The problem is everyone is rushing in and supply is tight.

Rew

bleary wrote: »

BOI don't deal with brokers
In any case people are not stuck there is leeway. 30% of borrowers will get an exemption on either loan /income multiple or on the deposit.

Worth noting that the exemptions are 15% of the LTV and 20% of LTI. Its calculated on the value of the loans not the number of mortgages.

TheDoc

OfflerCrocGod wrote: »

Brand new, A3 rated, 3 bed for €200K http://www.myhome.ie/residential/brochure/hampton-gardens-naul-road-balbriggan-county-dublin/3405803 if you have a good wage, as you claim, this should be no bother at all. €20K for a first time buyer deposit which should also be quite achievable.

Erm, you might not have read my post. I'm the sole earner in the household, there is nothing left for savings by the end of the month...

quadrifoglio verde

TheDoc wrote: »

Erm, you might not have read my post. I'm the sole earner in the household, there is nothing left for savings by the end of the month...

So what you're saying is that the only way for you to buy a house is if 100% mortgages are brought back?
After everything that's happened with negative equity and the consequences it has for both our banking system and borrowers, 100% mortgages won't be coming back for long and many a day.

McGaggs

McGaggs wrote: »

If they can't afford to save, how can they afford the mortgage repayments?

Bull.
People like the OP example are caught as they are now stuck paying rent/mortgage PLUS saving for longer.
I could easily afford another 500pm onto my mortgage (not that I want it) but could not magic up another say 30k immediately.

Given the rate of rent increase, those who would typically keep a healthy property market (and I mean healthy) going are having their ability to save eaten up. Just like increase in mortgage rates would but the difference is that they are not paying off any loan while renting.

Inspector Coptoor

We've been lucky with our rent the last 5 and a half years.
It hasn't increased at all and we are now in a position to buy.

We have saved €2000 a month for 3 years and paid €850 a month rent.
No holidays in last 18 months and focussing on increasing savings even further.

Just went sale agreed on a house in South County Dublin.Asking price was €450k and managed to get it for €430k subject to to the 2 surveys (structural and valuation).

Going for an 80% mortgage and 20% deposit.

A large deposit can be saved but it is contingent on paying low rent, a situation many people are not in anymore.

The new mortgage rules have benefitted us as our LTI gave us an upper limit of around €455k.
The market between €375k and €500k is really suffering from the LTI caps

MarkAnthony

Inspector Coptoor wrote: »

The market between €375k and €500k is really suffering from the LTI caps

To be fair though, as it should.

This is why I do wonder at the deposit requirements and hope that they are relaxed. The LTI on it's own seems to be working. I think systems allowing for lower deposits should be brought in even if it means requiring a higher monthly repayment during the first few years of the mortgage.

For example a couple paying €1200 rent looking for a €1000 mortgage could be subject to a 6% deposit but the affordability and stress tests be done at the €1200. This payment would be required until the relative equity in the home, say 10% was achieved.

One does wonder at the 20% for second time buyers. I actually have less of an issue here, I think the problem is more negative equity. Surely in an ideal world one would have built up enough equity to allow a move?

As for BTL 50% seems a very sensible way forward but I don't think this is a CB requirement?

TheDoc

Deleted User wrote: »

Bull.
People like the OP example are caught as they are now stuck paying rent/mortgage PLUS saving for longer.
I could easily afford another 500pm onto my mortgage (not that I want it) but could not magic up another say 30k immediately.

Given the rate of rent increase, those who would typically keep a healthy property market (and I mean healthy) going are having their ability to save eaten up. Just like increase in mortgage rates would but the difference is that they are not paying off any loan while renting.

This basically

When I was paying €600 - €700p/m on rent it was feasible to tuck some money away into savings. However now I'm paying €1300 p/m and after bills and expenses there simply isn't the money there to took away into savings.

So we made a decision when the new rules came in to kinda stop furrying away every penny and just living to pay bills and spent a bit of money every now and again. Even at that, we don't get up to much.

The criteria coming in at a time when rent prices are on the rise, has basically taken an entire section of society out of the equation. As an article I read last week indicated, the only young families getting mortgages are those lucky enough to have wealthy parents that can assist. (was a bit sweeping in its statement, but it broke down figures pretty nicely how people in my age group and household category, have really no facility for savings)

TheDoc

quadrifoglio verde wrote: »

So what you're saying is that the only way for you to buy a house is if 100% mortgages are brought back?
After everything that's happened with negative equity and the consequences it has for both our banking system and borrowers, 100% mortgages won't be coming back for long and many a day.

Well no, not exactly. If the market was in a more stable position, I'd have the facility to save over a period.

However the criteria coming in, while the market was in a rapidly upward trend, was a nightmare for me timing wise.

I'd absolutely love to have a mortgage right now, the proposed monthly repayments were laughable when I was speaking with various banks. Be coming out between 400-600 more disposable income a month

Kai123

TheDoc wrote: »

Well no, not exactly. If the market was in a more stable position, I'd have the facility to save over a period.

However the criteria coming in, while the market was in a rapidly upward trend, was a nightmare for me timing wise.

I'd absolutely love to have a mortgage right now, the proposed monthly repayments were laughable when I was speaking with various banks. Be coming out between 400-600 more disposable income a month

I pay €600 in a house-share (bills included) so I'm able to save, but I hate house-sharing.

Its painful that renting is not even an option. The last time I saw a one-bedroom it was 1k. There are alot of converted sheds popping up on the market, tiny self-contained one-bedrooms behind the house for around €800, but they are really, really small.

Its a strange position to be in. I'm really hoping supply ramps up in 2016. I'd much rather rent than buy somewhere, but until then life is on hold.

Unearthly

Standard Toaster wrote: »

Which bank was that if you don't mind me asking?

Bank of Ireland

Other factors such as being a long term customer and a lot of third level education(if I was made redundant, then I would be very employable) were apparently taken into account as well

MarkAnthony

Kai123 wrote: »

I pay €600 in a house-share (bills included) so I'm able to save, but I hate house-sharing.

Its painful that renting is not even an option. The last time I saw a one-bedroom it was 1k. There are alot of converted sheds popping up on the market, tiny self-contained one-bedrooms behind the house for around €800, but they are really, really small.

Its a strange position to be in. I'm really hoping supply ramps up in 2016. I'd much rather rent than buy somewhere, but until then life is on hold.

I'm afraid renting will play a backseat to purchasing. My guess is it will be 2017/18 before we see supply starting to settle down for purchasing and 2020 before we see the rental market begin to sort itself out.

There is simply no incentive for intervention in the rental market. The government are reaping huge amounts of tax from it, they can easily fool renters by essentially waggling the car keys at them and saying googly-googly (translation: Private landlords are arseholes blame them not us), many of them don't vote as they are transient - e.g. foreign nationals, people that don't register etc. No criticism intended just the way some people like to live. Finally there needs to be a huge shift of people off rent allowance and into either social housing or the private rental/purchasing markets which isn't going to happen in the short term.

One other point is, anecdotally, it seems many LLs are getting out at the moment leaving many accidental LLs stuck with neg equity apartments etc. They're simply not in a position to decrease rents, so again I don't see rents going down in the short term.

Uriel.

OfflerCrocGod wrote: »

Brand new, A3 rated, 3 bed for €200K http://www.myhome.ie/residential/brochure/hampton-gardens-naul-road-balbriggan-county-dublin/3405803

Oooh the bluff in these Ads make me want to puke:

The M1 motorway and Dublin Port Tunnel have made for comfortable commuting to and from Balbriggan passing through rolling countryside to your coastal home - an easy commute from the City and Dublin Airport.

MarkAnthony

Uriel. wrote: »

Oooh the bluff in these Ads make me want to puke:

The legendary 46A was my fave. I posted it here and it was defended to the hilt! :pac: