Does the CB realise how the new mortgage rules have effected people

Angel2016

I was just wondering does the CB and banks in general realise the negative effect the new rules are having on people trying to buy their first home together, do they realise how many people are going to be stuck in the renting sector for alot longer then they hoped?

Have they actually thought all of these rules through good enough, they said it was to stop the prices of houses rising which it seems to have done but also it has stopped alot of people from being able to buy a house, did they think about where there is a couple and one is a second time buyer and one is a first time buyer?
I'd like to know people's thoughts on this, do you think that Ireland will end up where more people just accept the fact they will stay renting for a good part of their lives and if so do we need clearer and precise rules for tenants and also for landlords.

pablo128

It's only part of the problem, the main one being lack of supply. The idea itself in a normal functioning market is a good idea.

silent_spark

The problem is not the CB rules, it's the lack of supply. Granted, it will take people a few years to readjust their expectations of when they can buy, as they may have to save a slightly higher deposit than they would have previously, but overall I think it was a really prudent move by the CB, and I really hope there won't be a reversal of the ruling or that it won't be eroded by overly generous first time buyer grants from the Government etc - and I say that as someone currently saving for a deposit.

I think what we need is more social housing / affordable housing built by the Government, pressure on developers to build on suitable land, and a reassessment of the cost of building.

omb0wyn5ehpij9

silent_spark wrote: »

The problem is not the CB rules, it's the lack of supply.

That right there is the issue. Simple as. I am 32 and would love to buy my own place, but the lack of supply means I can't. Lack of supply has pushed prices up again.

Saipanne

It's a good idea because it saves people from their own stupidity.

Michael D Not Higgins

Angel2016 wrote: »

they said it was to stop the prices of houses rising which it seems to have done

They have not stated this. They have in fact stated the opposite, in that it is not their intention to alter or control the cost of housing in any way. Their only intention is prudential lending and borrowing for mortgages to ensure a functioning market.

Halfbaker

We are currently struggling to save a deposit. Despite being directly affected by the new rules I believe they are a good thing. The ridiculously loose lending policies of the past can never be allowed to return.

Ursus Horribilis

I'm sure they do but then these are bankers and economists. They're not in the business of feeling sorry for the people who are now caught in the rental trap. In the future the regulations will be seen as a positive thing. Assuming rents drop back, supply increases and people have more time to accumulate their 20%. Unfortunately the short term, there are going to be a lot of people who are collateral damage. They're just numbers to these guys.

omb0wyn5ehpij9

Angel2016 wrote: »

In 2009 there was 106K mortgages granted but in 2015 there was 26K

I bet if you look at the number of houses built in 2008/2009 and compare it to the number of houses built in 2014/2015 those figures would make a lot more sense

intheclouds

I think there is going to be a long term impact felt on our society as a whole.

I know many people renting apartments who cant save a deposit at the same time as rent. Meanwhile the rents keep rising. They cant get somewhere cheaper because there is nowhere cheaper to rent.

The result? People are putting having children on hold because they havent got room for them, there is no stability (ie, long term rental contracts), and they cant afford them.

This impact on society is definitely going to be felt down the line I think.

witchgirl26

I'm not going to lie - I don't love the new rules because it does mean if I want to move with my partner, it's going to be a slog of saving to get the 20%. However from talking to my mam, when my parents bought their last house in the late 80's it was a 20% that was the standard. Yes house prices were lower but that came down to there being a bigger supply. I think the small deposits of the past 20ish years were the kinda of out there thing as opposed to the current set up which is going back to the way it was. 100% were never a good thing.

The supply of properties is this countries major issue now not the rules laid down by the CB. And with the exceptions that the banks can give, those who are struggling to get the 20% can get some help and relief.

MarkAnthony

OP if you think about this logically what do you want to happen? If you remove the CB rules you still can't buy because that €250K house is being sold for €750K. The issue is supply I'm afraid.

MarkAnthony

It's certainly not easy but then the CB probably think that people should be saving long term. I'm totally useless with money and would live month to month, thankfully the wife keeps me in check.

nhunter100

I think the CB rules are required . Sadly the Celtic tiger years proved that people need to be protected from themselves.

I have to leave my rented apartment and looked into buying, but am pretty much priced out of Dublin except for Balbriggan and the odd property in west Dublin. The maximum amount I can get with the 3.5x rule results in a mortgage that's still about 30% less than the rent I've been paying up to now. So I can afford to pay more, and have been for the last 8 years, but the rules won't let me borrow more. I'd rather not waste my first time buyer status on a property that's too far away.

As a result, I now have to look for alternative rental accommodation and pay even more than I already am now.

riclad

The celtic tiger showed that people will do crazy things ,
the rules reduce how much you can borrow.
Banks are totallly immoral ,they would lend 200 k to joe bloggs working in a chipper to buy a 2bed house in cavan in the boom.
Banks cannot be trusted to even act to protect their shareholders .
The problem is theres very little building going on .lack of supply.
relaxing the rules a bit would not have much effect on supply .
relaxing the rules would probably just increase the average price of a house.
How does that help the first time buyer ?
do people not remember the market in 2006,
house prices going up every month.

FrStone

witchgirl26 wrote: »

I'm not going to lie - I don't love the new rules because it does mean if I want to move with my partner, it's going to be a slog of saving to get the 20%. However from talking to my mam, when my parents bought their last house in the late 80's it was a 20% that was the standard. Yes house prices were lower but that came down to there being a bigger supply. I think the small deposits of the past 20ish years were the kinda of out there thing as opposed to the current set up which is going back to the way it was. 100% were never a good thing.

The supply of properties is this countries major issue now not the rules laid down by the CB. And with the exceptions that the banks can give, those who are struggling to get the 20% can get some help and relief.

Back in the eighties my parents were able to get a bridging loan - essentially a 98% mortgage. Never had a problem paying the thing back, it's worth way more now than what they'd have paid for it (including interest etc).

What annoys me the most is that we can't get mortgages from foreign banks. Free movement of goods and services only ever seem to work against us.

andekwarhola

If two people without kids don't have the joint income to pay rent (as in rent somewhere you can afford rather than love to live) and squirrel away a deposit on the side over a couple of years, then maybe they shouldn't risk buying a house.

Problem with a lot of Irish people is they refuse to accept that they can't afford to rent or buy where they want (usually because everybody else wants to live there) so complain about a 'functioning market' instead of downgrading exceptions.

beauf

I think what we'll see is that more people will rent long term.

Lots of areas will be come un-affordable. So people will move further out. It will be like London etc.

People might even just emigrate as its too expensive to live here.

Del2005

FrStone wrote: »

What annoys me the most is that we can't get mortgages from foreign banks. Free movement of goods and services only ever seem to work against us.

Just like the motor insurance market, if Ireland was risk free you'd have banks queuing up to give loans. The fact that you can stop paying a mortgage and not be evicted is a reason why foreign banks aren't lending here.

Pawwed Rig

During the boom people were willing to commute silly distances but now are more reluctant. Cheap housing available if willing to travel.

hmmm

If they relaxed the rules, all you would have is more people chasing the same amount of houses, forcing them to borrow more. The problem is supply, not the CB rules which are very sensible. We've been through a property price bubble that bankrupt the country, we don't want another one.

pablo128

Pawwed Rig wrote: »

During the boom people were willing to commute silly distances but now are more reluctant. Cheap housing available if willing to travel.

Catch 22 though. The money you would save, you would spend on petrol or diesel driving to Dublin where lets face it most of the jobs are. A chap in my job drives 200km a day to get to work from Laois.

RandomAccess

However bad it looks out there, it would be far worse without the CB rules. You would likely still be in the same position of being unable to compete but the asking prices would be far higher.

jimmycrackcorm

Halfbaker wrote:

We are currently struggling to save a deposit. Despite being directly affected by the new rules I believe they are a good thing. The ridiculously loose lending policies of the past can never be allowed to return.

The real question to be asked is why homes cannot be built at more affordable rates such as 150 - 200k....

yqtwqxqm

Karsini wrote: »

I have to leave my rented apartment and looked into buying, but am pretty much priced out of Dublin except for Balbriggan and the odd property in west Dublin. The maximum amount I can get with the 3.5x rule results in a mortgage that's still about 30% less than the rent I've been paying up to now. So I can afford to pay more, and have been for the last 8 years, but the rules won't let me borrow more. I'd rather not waste my first time buyer status on a property that's too far away.

As a result, I now have to look for alternative rental accommodation and pay even more than I already am now.

I wouldnt get too stuck into preserving your first time buyer status.
Seems like there is a good deal on it at the moment. In another year it could be gone again.
In the meantime how much is it costing you to preserve this FTB status - is it worth it?
A bird in the hand and all that.

yqtwqxqm

There are a lot of posts about people wishing they could get long term contracts on rentals.
The fact is you automatically have a long term contract on rentals now.
The only person who doesnt have a long term contract is the landlord. He has absolutely no comeback if the tenant decides they want out of the contract.

And if I could offer a 10 or 15 year rental contract that was equal for both sides I would gladly offer it.
The problem is that im the only one who is beholding to the contract.

riclad

Theres an article on the irishtimes about this,
it says irish builders grossly overpaid during the boom for land.
They are waiting for taxs to go down and house prices to rise .
or some inventive from the government .
I think it costs 100k to build a house minus the cost of the site .
A building charity built 10 houses in ballymun ,they are selling for around 150k.
maybe the builders are waiting for celtic tiger version 2.http://www.irishtimes.com/opinion/john-mcmanus-housing-plan-looks-like-a-bailout-for-builders-1.2731701

the government own the banks,
They have no wish for house prices to fall.
The banks still have 1000s, of loans on their books from the celtic tiger era.

Peist2007

yqtwqxqm wrote: »

There are a lot of posts about people wishing they could get long term contracts on rentals.
The fact is you automatically have a long term contract on rentals now.
The only person who doesnt have a long term contract is the landlord. He has absolutely no comeback if the tenant decides they want out of the contract.

And if I could offer a 10 or 15 year rental contract that was equal for both sides I would gladly offer it.
The problem is that im the only one who is beholding to the contract.

Fixed term leases give the Landlord security and override Part 4. You're welcome.

Pawwed Rig

pablo128 wrote: »

Catch 22 though. The money you would save, you would spend on petrol or diesel driving to Dublin where lets face it most of the jobs are. A chap in my job drives 200km a day to get to work from Laois.

Agreed. It isn't ideal but not 'dead money' as some people like to call it. The point being that the desperation to own at all costs does not seem to be there at the moment.

riclad wrote: »

the government own the banks,
They have no wish for house prices to fall.
The banks still have 1000s, of loans on their books from the celtic tiger era.

Don't forget NAMA which we also own

Idbatterim

my opinion is that the biggest "waste money" is going to the banks, in terms of the interest rates they are charging to developers and mortgage holders. Its all well and good saying dont interfere with anything, it will work itself out. Its housing, its too important to be just left to "the market" in my opinion...