‘Wait until new houses are built’ – Bank chief tells couples priced out of market
YOUNG Kilkenny couples desperately trying to get their foot on the property ladder have been told they must until new houses are built after the Central Bank refused to relax its tough borrowing laws.
There had been pressure from estate agents and mortgage brokers to relax lending limits that would help many people who are currently priced out of the housing market.
Central Bank Governor Philip Lane acknowledged high house prices and rents are posing serious affordability issues, but he said more house building was the answer.
“A fully functioning and sustainable housing market is not achieved by tolerating imprudent lending standards by banks or excessive borrowing by households,” he said
Brokers Ireland is among the organisations who have criticised the restrictions, which are particularly tough on couples hoping to buy in urban areas.
It said the Central Bank stance will force people into the rental market where there is a deep and widening gap between the amount needed to repay a mortgage on a house and the cost of renting a similar home.