Central bank mortgage lending rate changes

Claw Hammer

LegallyAbroad wrote: »

How or why would a single income applicant expect to compete with a double income?

The how is by working twice as hard and earning twice as much as before. The why is because a single person has to live as well

LegallyAbroad

appfry wrote: »

They wouldnt. Absolutely no point even trying anymore.

My point is how would they ever? It's not as if something has changed, it's just that a person with one income will, and has, never, all things being equal, be able to compete with two people on two incomes.

That's not society's fault or the government's fault, it's just simple maths - two people pooling working and pooling their income are, and should be, better off than one person working.

pilly

LegallyAbroad wrote: »

My point is how would they ever? It's not as if something has changed, it's just that a person with one income will, and has, never, all things being equal, be able to compete with two people on two incomes.

That's not society's fault or the government's fault, it's just simple maths - two people pooling working and pooling their income are, and should be, better off than one person working.

There did used to be rules around LTI before though to help single people out as far as I remember. Although I suppose that was celtic tiger days.

LegallyAbroad

Claw Hammer wrote: »

The how is by working twice as hard and earning twice as much as before. The why is because a single person has to live as well

Obviously, but they won't get to live in as nice an area or as nice a house as two people pooling their resources.

It's also sound public policy to encourage marriage/families.

appfry

LegallyAbroad wrote: »

My point is how would they ever? It's not as if something has changed, it's just that a person with one income will, and has, never, all things being equal, be able to compete with two people on two incomes.

That's not society's fault or the government's fault, it's just simple maths - two people pooling working and pooling their income are, and should be, better off than one person working.

You have to go back even before Celtic tiger days.
Thats just how it used to be.
You just would rarely ever be competing with a two income couple.
Most people buying were single income families.
But if a single person wanted to compete with them they could.
Now the vast majority buying are double incomes.
So a one income couple has no chance. Nor does your average single person.

LegallyAbroad

appfry wrote: »

You have to go back even before Celtic tiger days.
Thats just how it used to be.
You just would rarely ever be competing with a two income couple.
Most people buying were single income families.
But if a single person wanted to compete with them they could.
Now the vast majority buying are double incomes.
So a one income couple has no chance. Nor does your average single person.

True, but the country was far poorer in those days and gender inequality was far worse.

Reversing those two trends is probably the only way we return to majority single income families, and that's obviously not desirable. Most people want to work.

bleary

pilly wrote: »

There did used to be rules around LTI before though to help single people out as far as I remember. Although I suppose that was celtic tiger days.

No, it wasn't to help people out.
The rule was 3 times (or 3.5) the first income and 1.5 times the second income
This was based on the assumption that the little ladies income was only temporary and she would be giving up work once children arrived.

Claw Hammer

In my day it was 2.5 times one income and 0.5 of the other. BOI even went down to 2.3 at one stage.

kala85

Claw Hammer wrote: »

In my day it was 2.5 times one income and 0.5 of the other. BOI even went down to 2.3 at one stage.

What are the income rules now for a joint application or for someone who is married.

mariaalice

They are talking about this on the RTE 1 news with Phillip Lane and he made an interesting point that research shows that second time buyers show a greater risk profile that first time buyers that is why they are keeping the 20% deposit for second time buyers and trader uppers.

Shelga

LegallyAbroad wrote: »

My point is how would they ever? It's not as if something has changed, it's just that a person with one income will, and has, never, all things being equal, be able to compete with two people on two incomes.

That's not society's fault or the government's fault, it's just simple maths - two people pooling working and pooling their income are, and should be, better off than one person working.

Obviously no single person expects to be able to compete with couples for the leafy 4 bedroom semi-d. I don't expect to buy a house at all, just an apartment. But it's at the stage where it feels like in a couple of years, a single person won't be able to afford anything, even a one-bedroom apartment. I don't think the central bank rules should be relaxed but I do think more high-rise, or medium-rise apartments should be built to accommodate the new reality of people settling down later.

Also, you say in one post that it's not the government's fault that single people can't afford to buy, yet in the next you seem to think it's the government's job to encourage marriage/families? :rolleyes:

Like another poster said, single people have to live somewhere too.

Eric Cartman

appfry wrote: »

Single applicants are soon to be an extinct breed.
That road to extinction started the minute the powers that be decided to apply ongoing pressure to have both halves of a couple out at work.

Now single applicants just cant compete with double incomes.

attempting to buy any property in habitable parts of leinster on a single income is almost impossible. you'd have to be under 30 and on 100k+ to buy a damn 3 bed terraced gaf over 35 years. Even with the rates change , you still need 35k of a deposit, which isn't the easiest saved either.

Outkast_IRE

I am currently bidding on a property. As a first time buyer am i now clear to bid on the basis of needing only 10% (whilst meeting the other bank rules) as realistically by the time it goes sale agreed, a survey is done, a solicitor gets involved etc. it will be well into jan or feb at that stage.

ongarboy

Eric Cartman wrote: »

attempting to buy any property in habitable parts of leinster on a single income is almost impossible. you'd have to be under 30 and on 100k+ to buy a damn 3 bed terraced gaf over 35 years. Even with the rates change , you still need 35k of a deposit, which isn't the easiest saved either.

OK, but that begs the question, why does a single person need 3 or more bedrooms? A couple will invariably either already have or will have kids in the next few years so the fact they may have a double income gives them a justifiable advantage to getting mortgages for larger homes. I'm not saying a single person's status will never change but if they got on the ladder with a one or two bed apartment or townhouse that is cheaper, then when and if they meet someone who is also an earner, they could then pool their incomes for trading up to a larger home with hopefully appreciated capital on their starter properties. (of course many tried this during the boom only to be stuck in negative equity accommodation that was too small when their families expanded) but it appears there will be property appreciation for the next few years at least as the supply shortage remains.

I'm not saying single people should never aspire to owning larger homes if that's what they ultimately want but competing beyond your means with double income households for similar properties may result in having no property at all.

ongarboy

ongarboy wrote: »

OK, but that begs the question, why does a single person need 3 or more bedrooms? A couple will invariably either already have or will have kids in the next few years so the fact they may have a double income gives them a justifiable advantage to getting mortgages for larger homes. I'm not saying a single person's status will never change but if they got on the ladder with a one or two bed apartment or townhouse that is cheaper, then when and if they meet someone who is also an earner, they could then pool their incomes for trading up to a larger home with hopefully appreciated capital on their starter properties. (of course many tried this during the boom only to be stuck in negative equity accommodation that was too small when their families expanded) but it appears there will be property appreciation for the next few years at least as the supply shortage remains.

I'm not saying single people should never aspire to owning larger homes if that's what they ultimately want but competing beyond your means with double income households for similar properties may result in having no property at all.

Single income doesn't necessarily mean single person.

seanin4711

Doesn't matter a jot as there are no houses to buy

Inspector Coptoor

thierry14 wrote: »

Market will explode if 10% deposit is increased to 350k

A lot more people have 35k in savings vs 70k

Great news for the builders

All of the 300k new builds in Dublin,Cork, Galway etc only need 30k deposit now

A €300k gaff only needed a €38k deposit before the rule changes.

techdiver

[Deleted User] wrote: »

Single income doesn't necessarily mean single person.

I was just about to point this out. What we have now is a society where you either take the sacrifice to raise your own children or are forced to offload raising them to a stranger in a crèche. Many parents only really see or interact with their children at the weekends during the most important part of their early development.

This is the type of society being foisted upon us now. Very few single income families can afford housing now. What's even worse is the taxation rules are built in such a way that borderline punishes single income families also by not allowing full joint assessment of allowances.

athtrasna

Mod note

Can we get back on topic please. Thread is about rule changes.

paulb06

Just wondering can anyone point me in the right direction, been getting different answers everywhere.

We are looking for a 310,000 house, under old rules we needed 10% of the 220,000 (22,000) and 20% of the remaining 90,000 (18,000) so total 40,000.

Under new rules we need only 10% of the house price (31,000).

In regards to the help to buy grant we were getting 5% of the 310,000 (15,500) and we were told it would be offset to our deposit so under old rules we would need 24,500 more to get our deposit up.

Now under new rule does this mean 15,500 will be offset off our new lower required deposit of 31,000 meaning we now only need 15,500 to reach our deposit?

Our combined income is 54,000 and we were told we could get an exception to the LTV rule (something like that?) so the 3.5 times the joint income rule didn't come into it on our case.

REFLINE1

Are the banks still allowed 15% 3.5*LTI exceptions?
I noted the 15% exceptions of LTV has been reduced to 5%.

Floppybits

Daisy78 wrote: »

LegallyAbroad wrote: »

Agreed. It's expensive being single. But, I suppose, society has always been designed with couples/families in mind.

This is a disaster for single income earners. Double incomes with 10% savings will dictate the market now. Was planning on applying in the new year but not so optimistic now, with the earnings requirement still capped it makes it impossible to buy.

Not only is it a disaster for single income earners, it is also a disaster for families bought starter homes in the 2000's and now have families and want to upgrade. There is nothing here for those folks. Most of these folks have now become accidental landlords where they have had to rent out the starter home and then rent a house for themselves.
Now with these rule changes there is now way these families can compete with FTB's. Everything that has been done is for FTB's, does no one else matter?

the kelt

mariaalice wrote: »

They are talking about this on the RTE 1 news with Phillip Lane and he made an interesting point that research shows that second time buyers show a greater risk profile that first time buyers that is why they are keeping the 20% deposit for second time buyers and trader uppers.

Just on this, i can see the logic in this statement if for example a second time buyer is buying a a second house and has two properties and will be paying the mortgage on 2 x properties, its common sense!

But surely if you have already bought a property and have dutifully paid your mortgage on that property for x amount of years want to buy a second property but are willing to sell on your current property (even if it means bringing an element of negative equity with you) still leaving you with 1 property you should be considered a lesser risk than a first time buyer and as a result benefit from being considered for the 10% deposit also? I mean they have a track record of meeting their payments etc?

It just seems that they have a simplistic view across the board "first time buyer = good/ second time buyer = bad"

Surely someone willing to sell their current house and buy a different house, has a track record of meeting payments etc should be considered a first time buyer as such as there is actually clear evidence that they have met their payments over a sustained period of time?

Am i wrong?

mahoganygas

Floppybits wrote:

Not only is it a disaster for single income earners, it is also a disaster for families bought starter homes in the 2000's and now have families and want to upgrade. There is nothing here for those folks. Most of these folks have now become accidental landlords where they have had to rent out the starter home and then rent a house for themselves. Now with these rule changes there is now way these families can compete with FTB's. Everything that has been done is for FTB's, does no one else matter?

I hate the term accidental landlord.

If somebody bought a 2 bed apartment in 2000's with the full knowledge they would start a family in the future then that apartment was not a starter home, it was an investment. With any investment you accept the chance of values rising as well as falling.

If somebody bought a small home and then ended up with a larger unexpected family, then they are not accidental landlords. They are accidental parents.

It irks me that some people expect government intervention to ease the blow of their poor investment decisions. And let's be honest here, they were investments.

As a soon to be FTB, I have inherited a broken housing market from speculators in the 2000's. I have little sympathy.

Michael D Not Higgins

Floppybits wrote: »

Not only is it a disaster for single income earners, it is also a disaster for families bought starter homes in the 2000's and now have families and want to upgrade. There is nothing here for those folks. Most of these folks have now become accidental landlords where they have had to rent out the starter home and then rent a house for themselves.
Now with these rule changes there is now way these families can compete with FTB's. Everything that has been done is for FTB's, does no one else matter?

But these people own houses. The FTBs do not. Also SSBs are significantly higher risk than FTBs.

The policy is to help those who need it most and SSBs usually have the benefit of somewhere to live already. There are some cases which fall between the cracks, such as those in negative equity but they are exempt from the mortgage lending rules.

The only group who are suffering here are the people who bought before the height of the boom and have come out of negative equity relatively recently so don't have enough to fund the deposit requirements. These can be broken down further.

Firstly you have those who don't need to move and are fine where they are, no problems.

Secondly you have those who are overcrowded where they are and can't move, not great but could become the third case.

Thirdly you have those renting out their house and renting out somewhere else for their own family, not ideal.

Fourthly, the worst case, those who have already sold at a loss and don't own a property currently. They are getting shafted.

The problem with any measure to target one of these groups is that it is open to abuse from other who don't need help. FTBs on the other hand have not had the advantage of a property (unless inherited) and are politically and logistically easier to target for these measures. Not to mention it makes sense to help those who don't own a house during a housing crisis.

Michael D Not Higgins

the kelt wrote: »

Just on this, i can see the logic in this statement if for example a second time buyer is buying a a second house and has two properties and will be paying the mortgage on 2 x properties, its common sense!

But surely if you have already bought a property and have dutifully paid your mortgage on that property for x amount of years want to buy a second property but are willing to sell on your current property (even if it means bringing an element of negative equity with you) still leaving you with 1 property you should be considered a lesser risk than a first time buyer and as a result benefit from being considered for the 10% deposit also? I mean they have a track record of meeting their payments etc?

It just seems that they have a simplistic view across the board "first time buyer = good/ second time buyer = bad"

Surely someone willing to sell their current house and buy a different house, has a track record of meeting payments etc should be considered a first time buyer as such as there is actually clear evidence that they have met their payments over a sustained period of time?

Am i wrong?

It's borne out by the statistics. On average SSBs are older, later in their careers, trading up, so take a higher loan with less prospect for future salary gains and are more likely to fall behind.

FTBs are usually earlier in their career, much higher future salary potential and tend to get smaller loans.

goz83

mahoganygas wrote: »

I hate the term accidental landlord.

If somebody bought a 2 bed apartment in 2000's with the full knowledge they would start a family in the future then that apartment was not a starter home, it was an investment. With any investment you accept the chance of values rising as well as falling.

If somebody bought a small home and then ended up with a larger unexpected family, then they are not accidental landlords. They are accidental parents.

It irks me that some people expect government intervention to ease the blow of their poor investment decisions. And let's be honest here, they were investments.

As a soon to be FTB, I have inherited a broken housing market from speculators in the 2000's. I have little sympathy.

What planet are you living on? A starter home is just that. It is only an investment if the buyer planned to hold onto it and rent it out, while buying another home. Getting onto the property ladder as an owner/occupier is not what I would consider to be an investment.

Many of us have inherited a broken market, but it's FTBs who are getting the most hand-outs. As someone living in a 3 bed semi in Dublin and wanting to upgrade and bridge the NE and carry over an identical loan onto a higher value property, I have reason to be irked. As a FTB, you are largely being let off the hook where current owner occupiers are being tied down by rules and regulations that often make no sense (case in point).

sbsquarepants

mahoganygas wrote: »

As a soon to be FTB, I have inherited a broken housing market from speculators in the 2000's. I have little sympathy.

Your ire is a little misplaced - as a first time buyer now - you're getting that home at roughly half the price it was in the mid 2000's - what exactly are you moaning about?

Michael D Not Higgins

goz83 wrote: »

What planet are you living on? A starter home is just that. It is only an investment if the buyer planned to hold onto it and rent it out, while buying another home. Getting onto the property ladder as an owner/occupier is not what I would consider to be an investment.

Many of us have inherited a broken market, but it's FTBs who are getting the most hand-outs. As someone living in a 3 bed semi in Dublin and wanting to upgrade and bridge the NE and carry over an identical loan onto a higher value property, I have reason to be irked. As a FTB, you are largely being let off the hook where current owner occupiers are being tied down by rules and regulations that often make no sense (case in point).

If you have negative equity the rules do not apply to you, just the bank's standard mortgage underwriting.

Michael D Not Higgins

sbsquarepants wrote: »

Your ire is a little misplaced - as a first time buyer now - you're getting that home at roughly half the price it was in the mid 2000's - what exactly are you moaning about?

More like a third off, to get half off you'd have to go back a couple of years.