How does the bank lending rules help the working class?

Graham

An individual can't bring house prices down so must consider things that they can do.

Improve their financial position. Better job, payrise, family gift, savings etc.
Alternative methods of funding (Rebuilding Ireland Loan).

The sad truth is, not everybody is going to be in a position where they can buy their own home.

Rock77

Salary Negotiator wrote: »

But what actually happens is the house sells for about €330K and Pat still can't afford it.

What you don't seem to fully understand is that everyone is in the same boat. There are 100 houses to sell and 101 couples looking to buy, all things being equal the couple on the lowest income will be the ones who can't buy a house.

Looking at income mulitpliers, CB rules etc won't change the fact that the couple with the lowest income will always struggle to buy when there is a shortage of houses because they will be outbid on each and every house by couple who earn more.

Quite simply Pat needs to earn more or hope that demands falls to the point that there are more houses than couples.

The minimum wage in Ireland is €19,000ish and the average is €39,000ish.

So you and your partner would have to earn more than the average to afford a 3 bed semi in Celbridge..

That leaves a lot of people stuck paying high rent. I understand it wouldn’t be easy but what kind of things could a government do to help these people? Or should they be doing things to help?

Is there nothing wrong? Should people just save more? I know they have help to buy and 10% deposits for ftb’s.

Rock77

Graham wrote: »

An individual can't bring house prices down so must consider things that they can do.

Improve their financial position. Better job, payrise, family gift, savings etc.
Alternative methods of funding (Rebuilding Ireland Loan).

The sad truth is, not everybody is going to be in a position where they can buy their own home.

Only people on more than the average wage it seems... that’s a lot of people left behind..

Graham

Rock77 wrote: »

That leaves a lot of people stuck paying high rent. I understand it wouldn’t be easy but what kind of things could a government do to help these people? Or should they be doing things to help?

Both great questions.

The requirement for more social housing is almost a given at this point as far as I can see.

It is harder to argue that everyone should be able to buy a home regardless of their personal circumstances.

Eric Cartman

Salary Negotiator wrote: »

But what actually happens is the house sells for about €330K and Pat still can't afford it.

What you don't seem to fully understand is that everyone is in the same boat. There are 100 houses to sell and 101 couples looking to buy, all things being equal the couple on the lowest income will be the ones who can't buy a house.

Looking at income mulitpliers, CB rules etc won't change the fact that the couple with the lowest income will always struggle to buy when there is a shortage of houses because they will be outbid on each and every house by couple who earn more.

Quite simply Pat needs to earn more or hope that demands falls to the point that there are more houses than couples.

the problem is more like :

there is enough land to build 10x 20 storey blocks of 200 apartments in Dublin, but some people who own Georgian houses or 2 storeys in sandy mount gave out and now instead of 2000 apartments they're only building 400 on that land in some low rise developments. those 1600 people now compete for properties outside of the canals , but outside the canals the council and cluid are writing cheques for social housing too, driving up those prices , but some of that housing can't be built because Richard Boyd barret Clare daly have objected to social housing near their parents gafs, so the council and cluid compete further and further out along any public transport links, pricing workers out of areas with transport, so now those who need to work in Dublin are shuffled all the way to Ashbourne, navan, Naas, Gorey etc... so they need to drive to work, but the Green Party and the social democrats want to tax the arse off them for having to do so and the lads who live in Georgian houses in Dublin sit around in naff pubs wearing their lycra cycling gear and say 'but why are these fools killing the planet, can they not just bike to work like me'

Rock77

Rock77 wrote: »

Surely a stress test is enough, why does it have to be capped at 3.5?

It's not. Each bank has a limited number of exceptions they can make each year for customers that can demonstrate their ability to repay.

Rock77 wrote: »

So how do you bring house prices down? Build more houses? Is there any other way?

Is there nothing wrong?

Yes of course you build more houses. I'd also suggest certain changes to the way social and charitable housing is structured, and rules/regs around development but that's going off topic.

No one is saying there's nothing wrong - we're in the middle of a housing crisis. But saying that the banks just need to give people more money is short-sighted at best, and will only make matters worse. It'll still be the same small percentage of people with the best buying-power that will get the houses.

Rock77

true-or-false wrote: »

It's not. Each bank has a limited number of exceptions they can make each year for customers that can demonstrate their ability to repay.


Yes of course you build more houses. I'd also suggest certain changes to the way social and charitable housing is structured, and rules/regs around development but that's going off topic.

No one is saying there's nothing wrong - we're in the middle of a housing crisis. But saying that the banks just need to give people more money is short-sighted at best, and will only make matters worse. It'll still be the same small percentage of people with the best buying-power that will get the houses.

I don’t think the banks just need to give people more money, I do however think it would be a good start. As far as I can see it would raise the chances of a lot of people buying a home.

The general consensus here though is the CB rules are sound and it’s elsewhere that the issues are.

So I will just hope a new government is formed and they address these issues! While saving as much as possible of course...

LuckyLloyd

Rock77 wrote: »

So how do you bring house prices down? Build more houses? Is there any other way?

This is about more than the OP, I mentioned before. Bar workers, hairdressers, barbers, factory Ops, Quality Control, cashiers, laundry workers, cleaners, warehouse staff, even assistant managers in most places I worked are on less than €40,000 per year.

Most of these people can easily afford a loan of 4 times their income, Some pay a lot more in rent..

Build more houses, in particular the State must build many more social and affordable houses

Parallel to that, lower wage workers need to consider the full range of their options. One bed apartments; terrace houses; commuter towns; etc.

The rent argument vs mortgage repayment argument doesn’t stack up. It feels right, but it is a purely short term consideration. Rents will not be this high forever; interest rates will not be this low forever. Loading on an extra 2x your salary in debt because your repayment may be shorter than rent now when that repayment is a 35 year commitment doesn’t make sense.

Rock77

LuckyLloyd wrote: »

Build more houses, in particular the State must build many more social and affordable houses

Parallel to that, lower wage workers need to consider the full range of their options. One bed apartments; terrace houses; commuter towns; etc.

The rent argument vs mortgage repayment argument doesn’t stack up. It feels right, but it is a purely short term consideration. Rents will not be this high forever; interest rates will not be this low forever. Loading on an extra 2x your salary in debt because your repayment may be shorter than rent now when that repayment is a 35 year commitment doesn’t make sense.

Many workers on 30 - 35k which is a decent wage in my opinion have or want to have a family so a one bed is no good to them, most terraced houses in this particular commuter town are new so are priced higher than a second hand 3 bed semi.

It doesn’t matter if rents won’t be this high forever or to a lesser extent interest rates won’t be this low. The point is a mortgage repayment of €1300 per month is clearly affordable to someone who has payed 2k per month rent and saved €500 per month for the last 5 years.

And I suggested loading an extra .5 times your salary not x2

I just think it’s too restrictive, I get it has to be done but I just think 3.5 is too low

ELM327

Why not go for a new build and get the deposit matched by the help to buy?

Eric Cartman wrote: »

the problem is more like :

there is enough land to build 10x 20 storey blocks of 200 apartments in Dublin, but some people who own Georgian houses or 2 storeys in sandy mount gave out and now instead of 2000 apartments they're only building 400 on that land in some low rise developments. those 1600 people now compete for properties outside of the canals , but outside the canals the council and cluid are writing cheques for social housing too, driving up those prices , but some of that housing can't be built because Richard Boyd barret Clare daly have objected to social housing near their parents gafs, so the council and cluid compete further and further out along any public transport links, pricing workers out of areas with transport, so now those who need to work in Dublin are shuffled all the way to Ashbourne, navan, Naas, Gorey etc... so they need to drive to work, but the Green Party and the social democrats want to tax the arse off them for having to do so and the lads who live in Georgian houses in Dublin sit around in naff pubs wearing their lycra cycling gear and say 'but why are these fools killing the planet, can they not just bike to work like me'

Agree 110%

Rock77

ELM327 wrote: »

Why not go for a new build and get the deposit matched by the help to buy?






Agree 110%

New builds within 20km of where I’m from are all slightly out of reach for the same reason a second hand house is. I can only borrow 3.5 times my income.

Salary Negotiator

Rock77 wrote: »

New builds within 20km of where I’m from are all slightly out of reach for the same reason a second hand house is. I can only borrow 3.5 times my income. don't earn enough.

Sorry to keep banging this drum, but it's important that you understand why you can't buy a house so that you can take positive steps to improve your situation.

Ush1

Salary Negotiator wrote: »

Sorry to keep banging this drum, but it's important that you understand why you can't buy a house so that you can take positive steps to improve your situation.

Username checks out!:pac:

Rock77

Salary Negotiator wrote: »

Sorry to keep banging this drum, but it's important that you understand why you can't buy a house so that you can take positive steps to improve your situation.

Ah no I get it, I have a plan and am on course to get there. I am working with the assumption the CB rules will not change to benefit me.

Sheep Shagger

Rock77 wrote: »

Ah no I get it, I have a plan and am on course to get there. I am working with the assumption the CB rules will not change to benefit me.

Good stuff - that's a safe assumption, best of luck.

mariaalice

https://www.myhome.ie/residential/brochure/93-milltown-estate-ashbourne-co-meath-a84-dy04/4414632

245k, Ashbourne is barley outside Dublin.

Ashbourne has lots of facilities for familys.

The OP has a good bit of choice its just a matter of a few compromises.

lalababa

The blame for high price of dwellings in Dublin lies at the council's feet. And by extension FF & FG.
Through ineptitude/ fear and electioneering they have come up with a city comprised of a 35mile suburbia. The radius is growing as we type.

ELM327

lalababa wrote: »

The blame for high price of dwellings in Dublin lies at the council's feet. And by extension FF & FG.
Through ineptitude/ fear and electioneering they have come up with a city comprised of a 35mile suburbia. The radius is growing as we type.

I agree.
What they have done is created a 3 tier society, as follows:

• Lifetime social welfare - This group are given heavily subsidised housing in the city/surrounds
• Upper Middle class and upward - This group can afford to live where they want, including DCC, but often choose not to
• Lower middle class and below, eg menial workers or minimum wage/sub 30k jobs, these folks cannot afford to live in DCC unless it's a bad area. And often they earn just too much to qualify for social support

This is the problem. And I lay the blame firmly at the socialist elements of government.

Donald Trump

ELM327 wrote: »

I agree.
What they have done is created a 3 tier society, as follows:

• Lifetime social welfare - This group are given heavily subsidised housing in the city/surrounds
• Upper Middle class and upward - This group can afford to live where they want, including DCC, but often choose not to
• Lower middle class and below, eg menial workers or minimum wage/sub 30k jobs, these folks cannot afford to live in DCC unless it's a bad area. And often they earn just too much to qualify for social support

This is the problem. And I lay the blame firmly at the socialist elements of government.

An area is usually "bad' only due to the people who live there. Of course, it might lack other facilities, but that can be a chicken and egg scenario too. Under a "capitalist" government, that would obviously be magnified. In terms of it you take the full extension and have people live where they can afford.

ELM327

Donald Trump wrote: »

An area is usually "bad' only due to the people who live there. Of course, it might lack other facilities, but that can be a chicken and egg scenario too. Under a "capitalist" government, that would obviously be magnified. In terms of it you take the full extension and have people live where they can afford.

As opposed to the current bastardization (yes it's a word) of the current hybrid of capitalism and socialism, taking the worst of both, allowing the freeloaders free (or 90% subsidized) access to housing where those paying their own way and not receiving state support cannot.

LuasSimon

ELM327 wrote: »

I agree.
What they have done is created a 3 tier society, as follows:

• Lifetime social welfare - This group are given heavily subsidised housing in the city/surrounds
• Upper Middle class and upward - This group can afford to live where they want, including DCC, but often choose not to
• Lower middle class and below, eg menial workers or minimum wage/sub 30k jobs, these folks cannot afford to live in DCC unless it's a bad area. And often they earn just too much to qualify for social support

This is the problem. And I lay the blame firmly at the socialist elements of government.

More people will be looking at been in the Lifetime social welfare class than the lower middle income class .

I know people who never worked who have corporation houses in Dublin whilst some others who got modest jobs are killing themselves trying to pay a mortgage on some average house in co kildare and driving 10 hours a week . Who has the better life ??
If you have a family youd need to have a very good job to better a free house and welfare in Dublin

Donald Trump

ELM327 wrote: »

As opposed to the current bastardization (yes it's a word) of the current hybrid of capitalism and socialism, taking the worst of both, allowing the freeloaders free (or 90% subsidized) access to housing where those paying their own way and not receiving state support cannot.

I think you took something else from my point. I was simply saying that most areas are not inherently "bad". There were once fields there. Those fields were not inherently bad. We're not talking about back in the day with the environmentally polluted area of town or downwind of the local dump or downstream of the local river which is used as the sewerage drain. They are not living in tidal marshes that flood. It is the people who make shite of an area. It doesn't matter where you put them. It's obviously not all the people either. But enough to cause the trouble and deterioration.

But to your point, the wealthy generally do not get social housing in their areas. Maybe a few token ones here or there. So if you don't want to mix with what you consider freeloaders, then you either have to earn more, or try to draw that line lower beneath you. Either you move above that line, or you try to move that line below you.
Going for the latter seems easier but it might not have the results that you envision.

lomb

You can buy a house in Detroit for cash https://www.ebay.com/itm/2-story-house-duplex-/262009423109
Classic example of supply and demand as well as too many houses for number of jobs coupled with low social welfare payments

fret_wimp2

Central bank lending rules are not your problem OP.

Forget the lending rules for a sec.
Imagine everyone in Ireland was gifted 1 million euro each.
We can all afford houses exactly where we want now right?

Or, bidding wars start in the most desirable areas, and people with extra money on top of that million euros end up being able to buy.
House prices simply all go up by a million quid.
That 200k house you can afford in an area you find less desirable is now valued at €1,200,000.

Increase the amount people can borrow and an identical scenario unfolds.
The market will find equilibrium, and those with more money will have more choice of where to live.

Your choices are to earn more money, come into money via a windfall or adjust your expectations.
Some people want to live in Blackrock or dalkey but can't afford it so have to buy elsewhere.
Likewise some people want a house within the m50 but can't afford it and have to either buy elsewhere or rent.

Central Bank rules are not a problem for you, your current earnings are.
It's harsh, but it's reality and we all have to face it.

Eric Cartman

lomb wrote: »

You can buy a house in Detroit for cash https://www.ebay.com/itm/2-story-house-duplex-/262009423109
Classic example of supply and demand as well as too many houses for number of jobs coupled with low social welfare payments

detroits problem is a massive crime rate, particularly violent crime, crack addiction riddles Detroit, also the property taxes are a nightmare. You can buy houses in Detroit for $10 , but you'll owe 5 grand a year in taxes on them.

ELM327

fret_wimp2 wrote: »

Central bank lending rules are not your problem OP.

Forget the lending rules for a sec.
Imagine everyone in Ireland was gifted 1 million euro each.
We can all afford houses exactly where we want now right?

Or, bidding wars start in the most desirable areas, and people with extra money on top of that million euros end up being able to buy.
House prices simply all go up by a million quid.
That 200k house you can afford in an area you find less desirable is now valued at €1,200,000.

Increase the amount people can borrow and an identical scenario unfolds.
The market will find equilibrium, and those with more money will have more choice of where to live.

Your choices are to earn more money, come into money via a windfall or adjust your expectations.
Some people want to live in Blackrock or dalkey but can't afford it so have to buy elsewhere.
Likewise some people want a house within the m50 but can't afford it and have to either buy elsewhere or rent.

Central Bank rules are not a problem for you, your current earnings are.
It's harsh, but it's reality and we all have to face it.

Great post
Should be mandatory for any lefty loon td (SF, AAA/PBP etc I'm looking at you) to read and comprehend this.

Rock77

ELM327 wrote: »

Great post
Should be mandatory for any lefty loon td (SF, AAA/PBP etc I'm looking at you) to read and comprehend this.

So everyone in Dublin and surrounding areas that doesn’t earn above the average wage will just have to pay crazy high rent while trying to save a deposit. It’s not a select few that this affects.

Will we carry on with only the well off being able to afford a home and have a serious lack of social and affordable housing?

People keep saying, you need to earn more. 30k to 35k is a very decent wage and also a wage well capable of paying back mortgage repayments of €1200 per month. considering the minimum wage is 20k ish.

It’s not the loony left that has us in this complete mess.

Eric Cartman

Rock77 wrote: »

So everyone in Dublin and surrounding areas that doesn’t earn above the average wage will just have to pay crazy high rent while trying to save a deposit. It’s not a select few that this affects.

Will we carry on with only the well off being able to afford a home and have a serious lack of social and affordable housing?

People keep saying, you need to earn more. 30k to 35k is a very decent wage and also a wage well capable of paying back mortgage repayments of €1200 per month. considering the minimum wage is 20k ish.

It’s not the loony left that has us in this complete mess.

Its not that you cant buy a house, you just cant buy a house in dublin city. If we refused to keep giving in to the demands of the perpetually unemployed it would be a lot easier to live in or around dublin, its not the wealthy keeping you out of houses in dublin, its government policy requiring social housing and bodies like cluid competing bidding up prices pushing working people put of the city and replacing them with layabouts

Rock77

Eric Cartman wrote: »

Its not that you cant buy a house, you just cant buy a house in dublin city. If we refused to keep giving in to the demands of the perpetually unemployed it would be a lot easier to live in or around dublin, its not the wealthy keeping you out of houses in dublin, its government policy requiring social housing and bodies like cluid competing bidding up prices pushing working people put of the city and replacing them with layabouts

I want to buy a house in North Kildare not Dublin.

My point was it’s government policy that’s the problem. It was in response to a poster who mentioned the loony left..

Eric Cartman

Rock77 wrote: »

I want to buy a house in North Kildare not Dublin.

My point was it’s government policy that’s the problem. It was in response to a poster who mentioned the loony left..

it was government policy called for by the left. Developers having to build 10% minimum social housing, cluid, etc...

if anything houses would be more unaffordable if you had a 'left' government.