Repayments for first-time buyers down 50% in 4 years

THE AVERAGE first-time buyer is now paying half of what they would have paid on monthly mortgage repayments in December 2006, according to the latest affordability index from EBS and economic consultants DKM.

The survey found the average monthly mortgage repayment for a first-time-buyer working couple was €644 per month in April, compared to €1,323 in December 2006. The average such couple is now paying 12.6 per cent of their joint net income compared with 26 per cent three years ago. The index predicts that this will fall further to 12.4 per cent of net income.

The survey predicts that affordability will continue to improve for first-time buyers, although the index does not take rising interest rates or future employment trends into account.

EBS has seen a 50 per cent increase in first-time-buyer applications this year. Yesterday, the building society said it has received approximately 2,100 applications to date in 2010, twice as many as last year.

Figures released by the Irish Banking Federation last week showed lending to first-time buyers was down by 1.2 per cent in the first quarter of 2010 compared to 2009. This compares to an overall drop of 36.8 per cent in new mortgage lending.

Ciaran Phelan of the Irish Brokers Association said that while the relative value of property has improved considerably, “it has never been more difficult to get a mortgage in the Irish market”.

Meanwhile, data from Daft.ie shows rents continued to fall in the first quarter, though at a slower pace than previous quarters. Ronan Lyons, economist at Daft.ie, said the signs “point to a market starting to stabilise”.