Fine gael td concerned by proposed mortgage lending requirements
Fine Gael TD, Helen McEntee, has expressed concern at the potential impact of proposed changes to mortgage lending requirements on young people trying to buy a home.
Potential homebuyers should provide 20 per cent of the cost of a property in order to qualify for a mortgage, according to recent proposals by the Central Bank.
Meanwhile, An Taoiseach Enda Kenny TD has stated that the Oireachtas Finance Committee will prepare a report on access to credit for first time buyers. The report will also examine the feasibility of a 'mortgage insurance' scheme, which was welcomed by Deputy McEntee.
'As a 28 year-old who is, like most people, hoping to buy or build a property at some stage in the future, I am very concerned about the impact that the Central Bank’s proposed changes to mortgage lending requirements will have on the ability of individuals and young families to qualify for a mortgage,' she said.
'The 20 per cent rate which is being recommended by the Central Bank is too high and will unduly exclude many credit-worthy potential homebuyers from buying a home,' added Deputy McEntee.
The Fine Gael TD suggested that the rate should be between 10-15 per cent and that other criteria, such as income, should be taken into account.
'The Central Bank needs to find a balance between facilitating home ownership for credit-worthy individuals and families, and allowing the banks to become overburdened with debt which it cannot sustain,' she added.
Deputy McEntee acknowledged concerns about a property bubble developing in Dublin and surrounding counties such as Meath, where demand and prices for homes have increased acutely in the past year. This, she believes, is putting more pressure on potential homebuyers to raise funds.
'Making these people raise 20 per cent of the cost of a home will exclude tens of thousands of people from the fundamental aspiration of home ownership and will ensure that many have to rent their accommodation for an unduly long period of time,' she said.
Deputy McEntee noted that the Central Bank should arrive at a recommendation that will protect the banks from financial difficulty while enabling people to buy homes in a sustainable and affordable manner.