Mortgage Lending Rules Budget 2016

Glen_Quagmire

I heard yesterday that the budget will contain new mortgage lending rules for FTBs to the tune of reducing the required deposit and increasing lending to 4.5 times salary.

I've had a search and can't find any backup to this.

Is there any truth in this is or will we only find out when the budget is actually released

Zenify

Glen_Quagmire wrote: »

I heard yesterday that the budget will contain new mortgage lending rules for FTBs to the tune of reducing the required deposit and increasing lending to 4.5 times salary.

I've had a search and can't find any backup to this.

Is there any truth in this is or will we only find out when the budget is actually released

The government can't change the central bank rules. They may try and help in some way but I doubt (and hope) they don't just give people more money. More more with reduced supply means more expensive houses and nothing else.

athtrasna

With a month to go to budget day, anything can happen. Nothing will be confirmed until the speech itself.

Glen_Quagmire

So what I heard yesterday was BS.

Has any hints been dropped about what is expected?

athtrasna

Glen_Quagmire wrote: »

So what I heard yesterday was BS.

Has any hints been dropped about what is expected?

Any leaks could affect the housing market so they'll be keeping this quiet until budget day in so far as possible. Wait and see, it's not that far away!

KwackerJack

Bad idea.......it will only raise house prices.

On a good note if your renting the chances are your paying way more per month (bad note) that what the house repayments are.

The banks should take this into account!!

_kookie

Maybe someone should tell them that FTBs arent the only people trying to buy houses.
There are so many people looking to trade up who are frozen out at the moment.
As well as a huge section of people who are buying with a non FTB buyer who are classed as non FTBs too.

whiskeyman

The CB rules are logical and sound.
The real issue is supply and this is what needs to be challenged more.

seamus

There have been hints for the last 18 months about all sorts of schemes the government might run to "help" FTBs. The most recent suggestion was an SSIA-style savings account for FTBs to put their deposit savings into and get a top-up from the government.

Ultimately all of the evidence has shown, both domestically and internationally, that when you provide direct assistance to purchase property, prices rise. And those being "assisted" gain nothing except additional debt.

As a property owner, I welcome any government-sponsored inflation measure that will increases the value of my house overnight.

But as someone who has to live in this economy and got stung in the last boom, the government needs to keep its nose out of direct interference in the property market.

The government does need to provide a pressure valve in the form of social housing, to catch those who cannot afford, and most likely never will be able to afford housing at market rates.

But outside of providing indirect incentives that balance the supply and demand of housing, the government needs to stay the **** out.

Residential building is on the up. It doesn't change quickly, it can't change quickly. Leave it as it is, maybe nibble at the edges; it will continue to increase as time goes on and demand requires it. Budget measures designed to massively increase building output over the course of one or two years will just burn us 3 years later. That's exactly what happened last time.

Budget 2017 should be focussing on putting in place measures that are relevant to where construction is going to be in 2020, not where we want it to be in October 2016.

Michael D Not Higgins

_kookie wrote: »

Maybe someone should tell them that FTBs arent the only people trying to buy houses.
There are so many people looking to trade up who are frozen out at the moment.
As well as a huge section of people who are buying with a non FTB buyer who are classed as non FTBs too.

The implication is that the non-first time buyers have previously availed of the schemes and benefits that were available for them when they bought initially.

Due to this, they should either
a) have a property they can sell to trade up,
b) be in negative equity in which case they can qualify for a negative equity loan, or
c) have a property to house themselves already.

Yes, there are a few cases where someone has bought a property which is now unsuitable and they're renting elsewhere and haven't enough equity to help them trade up. You could suggest a policy which would be able to target these people, but I'm sure most measures would be difficult to police and open to abuse.

Michael D Not Higgins

whiskeyman wrote: »

The CB rules are logical and sound.
The real issue is supply and this is what needs to be challenged more.

I think the important thing to note is that when you look at Dublin prices, they were growing 20% per year before the mortgage lending rules and only 1-2% after. This is despite the supply issue and is a clear indicator that something positive has come from them, namely curtailing wild overheating of the property market.

The_Conductor

Guys- just to reiterate a point raised above- the Central Bank is independent and does not answer to the Minister for Finance (or anyone else). It is not in the giving for the Minister to suggest there will be a modification of deposit rules, income multiples- or indeed any other function ascribed to the Central Bank. I, for one, am thrilled that the Central Bank has balls, and isn't answerable to the Minister- for about the first time in our history. It does not bow to political pressure- thankfully.

If the Minister genuinely wants to help first time buyers- or any other people who are interested in the market- he needs to make the climate for developers a lot more comfortable- so they actually construct property. This however, has to include, a removal of rules governing building heights in our major cities. Wholly aside from our lack of any recent large scale construction- that construction which has occurred- is low density and scattered in nature- when we critically *need* high density developments in our major urban centres.

newacc2015

Honestly I think this Budget will be very interesting to say the least. The Apple tax ruling was a train wreck during a normal period, but considering it is so close to the budget with a Government that has a mild possibility of breaking up due to the Apple scandal. Plus I think the Section 110 tax scheme has yet to gain momentum, which will make the Apple tax ruling seem mild. I can imagine this budget being so vanilla, that you cant expect anything more than a few tax cuts and a few mild give aways. I cant imagine anything that will involve debating being on the table, being remotely considered in the budget

Personally I think the Government needs to stop blaming the private market for the lack of affordable housing to rent and buy. CoCo's and City councils need to build vast amounts of property and not be allowed to sell. The likes of DCC needs to set up housing trusts to stop the selling of property when parties are looking to buy some quick votes. IMO the selling of social housing has been a total disaster. There is a ton of social housing around Dublin that IMO would have been flatted and replaced with higher density housing. The fact there is generic 3 storey DCC social houses beside ultra luxury high rise apartments in Grand Canal Square is mind boggling to say the least. There is no point spending billions on new social housing to have it pawned off in a few years

Probably the most effective thing for housing is tax breaks for residential properties. Section 23 was extremely popular. Give developers tax breaks to build housing for middle income families ie people earning €20k-35k per annum. NYC and other cities in the US do it. Rental properties for middle income people badly needs to be build and it will indirectly help people on welfare, as it will stop middle income people competing with them for the same property. Middle income housing can be higher density with less of the social issues of low income housing. Ie there is far less social issues in Drumcondra than Ballymun

Michael D Not Higgins

http://www.broadsheet.ie/2016/09/06/debt-knell/

http://www.irishtimes.com/opinion/letters/housing-crisis-and-mortgage-rules-1.2780473

At least there's some common sense among the population, but not amongst our politicians or lobbyists it seems. David Hall (Irish Mortgage Holders Association) was seemingly on the radio campaigning at once for debt forgiveness and looser credit restrictions.

...a leading campaigner for debt forgiveness is simultaneously campaigning for looser credit rules. A quick check shows that this contradictory position is shared across many political parties.

riclad

Look at the boom in the celtic tiger housing market,
Loose lending rules just increase house prices ,
a house thats now 200k will be 300k if lending rules are relaxed .
This doe,s not help young people or first time buyers .
The rules we have now are there to stop another boom bust cycle
in house prices .
Those who do not learn from history are doomed to repeat the previous
generations mistakes .
Politicians looking for votes may say loosen the lending rules .