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Updated at 9.16am
THE CENTRAL BANK’S proposed new mortgage rules will result in rents pushing above boom levels in urban areas, according to estate agents.
Rents in some areas are roughly 10% off their 2007 peaks already.
The proposed mortgage guidelines would require most potential home buyers to come up with a 20% minimum deposit, and most loans will be for a maximum of three-and-a-half times the borrower’s income.
However, there is a fear that the effect of new mortgage rules will be felt most strongly in urban areas, meaning as more people turn to rental property, rents will creep up.
The Real Estate Alliance is calling for the Central Bank to consider introducing different requirements for each part of the ‘three-tier market’ that exists in Ireland.
This consists of Dublin, followed by the commuter counties and large urban areas nationwide such as Galway and Cork, and finally, the rest of the country.
“We call for the Central Bank to acknowledge the three tier market by introducing realistic brackets for different house prices, which would assist in removing the geographical inequities which are apparent in the sector,” chief executive Philip Farrell.
The price of an average house can range from €60,000 in some counties to €425,000 in particular parts of Dublin and as result of this, people buying in the capital may require a net deposit of €70-80,000.
‘Some resistance’ to plans
Central Bank governor Patrick Honohan is expected to announce the full details of the proposed mortgage caps next week, although he told an IMF conference on Monday that there was ‘some resistance’ to the new plans.
The Irish Times today reported the Central Bank was now looking at different rules for first-home buyers involving lower deposit limits for those trying to take a step onto the property ladder.
It was unclear whether the rules would only apply to properties under a certain price, the newspaper said, while another likely change was a phasing-in of the changes in response to criticism from the Department of Finance.
However TheJournal.ie understands no final decisions have been made yet on whether the original, proposed mortgage cap would be modified at all.
The Central Bank wouldn’t comment on the report when contacted today.
Plan still has merit
Meanwhile, Farrell stressed that the Real Estate Alliance is welcoming plans to ensure the market is kept under control – but notes that it is untested in an economy like that of Ireland.
There is absolute merit in what the Central Bank are introducing and it is to be welcomed in assisting in the prevention of a property bubble in the future,” he said.
“This has proven successful in particular parts of the world, especially Asia. However, it remains somewhat untested in this part of the world.”
Additional reporting Peter Bodkin
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It’s all well and good to keep branches open a little later, but it’s of no use to those of us on holidays abroad with no access to our pay.
Or those of us who work shifts! They should immediately give all affected a fee free overdraught. Because of not having had a pay slip issued yet, they refused me cash today….bastards.
that is fckucking terrible Dave. Im facing the same shite on wednesday, and if i dont get my pay slip to them i miss my direct debit and my mortgage payment. And I start nights on wednesday
In the same boat with dd’s but I called a couple of companies yesterday and they said that the dd hadnt been rejected, it was showing as hanging and should go through, just late, when ulster get around to processing it and that as said companies know about the situation they won’t be penalising me.
The same Central Bank that practises”light touch regulation”. I’m sure Ulster Bank are cacking themselves.
That should sort it out so now – no doubt UB were just kicking back until the CB ‘pressed’ them.
Thought the same thing. Finally someone stepped in to have a stern word. It’s about time …
http://www.theregister.co.uk/2012/06/25/rbs_natwest_what_went_wrong/
“The tech problems at the RBS banking group that left millions of people unable to access money for four days last week were caused by a failure in a piece of batch scheduling software, sources have told The Register.
And at least some of the support staff for that software have been outsourced to India – as recently as February.”
Here’s how actual regulation works in the US – don’t process cheques for more than 24 hours?
Ok, Federal Reserve steps in. Your bank is probably shut down and its assets redistributed to other banks.
Oh, and how are the cost savings on all those outsourced IT workers looking now? Where are the 1500 workers that were laid off? Too busy to help? Aw shucks. By the way, did you ever catch the guy who was selling a computer with customer data on ebay?
I’m at a bit of a loss here. If they’re dealing with a backlog you would expect that to be cleared in an orderly fashion. My wages were due today, but given what’s going on I didn’t expect to be able to access the funds until the end of week at least. However, this morning when I checked my balance the money was there . Seems a bit odd, don’t u think??
Not alot the central bank can do, problems also in royal bank of scotland and natwest. Its not good for the people who cannot access their accounts.
I posted a cheque to my account last Wednesday and am still waiting for it to be processed and show in my balance. I’m sure things are a lot easier for bankers on a huge salary but when you need the money to buy the necessities and to pay bills, it’s a different story. nMy guess as to what happened is that they were making changes to their systems to allow for changes in transaction fee on accounts and someone fecked something up.
What I heard from an inside source is that they were upgrading the system (CAC7?) that basically is the master plan for every individual batch operation that the runs overnight. This upgrade didn’t go as planned so apparently they rolled back to the older version. It seems that the masterplan was no longer present in the system so no jobs were run overnight and hence the chaos started. This is inline with what The Register are saying.
The story is that this batching activity was moved offshore so I’d imagine there’s some old staff getting some handsome short term contracts to sort this out!!
You’ve got to wonder why they were upgrading all three banks at the same time. It would be bizarre if any bonuses were paid in this bank this year. It’s a basket case and I’m one of their customers. I was fortunate that my wages were processed the day before this happened!
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