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Mortgage rules ‘put ownership of homes beyond reach of many’

The Central Bank’s new restrictions on mortgage lending will stop many people from ever buying a home and trap thousands into paying unaffordable rents, it has been claimed.

Mortgage Brain Ireland, which supplies systems to mortgage brokers, agents, and banks, said its research showed that almost half of potential home buyers will be stopped in their tracks from securing a home loan in the next three years because the Central Bank rules are too onerous.

Chairman Michael Dowling said: “This represents 12,000 first-time mortgage seekers who will be trapped into funding rental payments of almost €70m annually, at a time when rent rolls are increasing by a national average of 8.2%.”

The research, undertaken by Coyne Research for the mortgage firm, may reignite the furore over the rules which insist that first-time and second-time buyers put aside large deposits before they can borrow from lenders to buy their homes.

The Central Bank has said the rules are necessary to stop any repeat of the credit-fuelled explosion in lending that contributed to the country’s banking and economic crash seven years ago.

Mr Dowling said the rules are a huge burden on a generation of young home buyers and puts “home ownership in the hands of the privileged few professionals”.

“This means, for example, that a couple who are now trying to buy a house worth €300,000 will need a deposit of €38,000 and a joint income of €75,000,” he said.

“There has got to be a better, more equitable way to solve this mortgage famine. Otherwise many couples will find themselves condemned to rent for the next three-five years until they have saved the deposit and then be earning sufficient income to qualify for a mortgage.”

The warning comes as Mortgage Brain launched an ‘Irish Mortgages’ app. The company said it is designed to help customers and advisers to find the best home loan.

“The app provides mortgage seekers with instant free access to just about all the information they need to pinpoint the best intermediary mortgage for their requirements,” Mortgage Brain said.

“Consumers can also find a nearby broker to manage their application process with an intermediary lender all the way to loan approval.”

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