Brokers Ireland calls for more dramatic measures to tackle crisis

Brokers Ireland has called for more dramatic measures to tackle the current housing crisis.

The recent CSO house price data report revealed a slight moderation in house price inflation, from 12.2 per cent in the year to September to 11.6 per cent in the year to October in Dublin, and from 13.2 per cent to 12.8 per cent in the rest of Ireland during the same period.

However, Brokers Ireland says this tells us nothing new, but continues to point to the dysfunctional nature of a housing market starved of supply.

Rachel McGovern, director of financial services at the organisation, says that if second and subsequent buyers had been treated similarly to first-time buyers under the Central Bank mortgage lending rules - that is being subject to a requirement to find a 10 per cent rather than a 20 per cent deposit - it would improve availability.

“We’re not saying this is the entire answer to the property shortage or anything like it,” she commented. “However, it would create more movement and availability, enabling such people to move to accommodation more suited to their current needs and making their current properties available to first-time buyers.”

Ms McGovern said Brokers Ireland believe the 3.5 times lending limit is also too restrictive and should have been increased to 4.5 times salary.

“There is no question of excessive lending on the horizon with mortgage lending for year-end likely to be well slack of the €10 billion that could be considered normal,” she continued. “The tragedy of the current situation is that generations are being locked out of the housing market. It may be some time before it is realised the negative impact that will have on their personal wealth over the longer term.”

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