Auctioneers call for change to 20% mortgage deposit rule

The Institute of Professional Auctioneers & Valuers (IPAV) has called for the 20 per cent deposit rule for home buyers introduced by the Central Bank to reduced to 10 per cent.

The organisation's chief executive, Pat Davitt, said if the requirement remains at 20 per cent it will put home buying out of the reach of many who are currently planning to buy their first home.

“If the proposed measures, which the Central Bank says are not designed to steer or limit house prices but to restrict lending, 10 per cent should be effective. In the event that it wasn’t effective it could be increased,” he said.

“The proposed measures will militate against first-time buyers whose parents are less well off and not in a position to assist with such a large deposit requirement, ” Mr Davitt said.

“Those who are currently paying rent will also be hit hard because they have a lesser capacity to save by virtue of the fact that they are paying rent. And now there will be more competition in the rental market,” he said.

The Central Bank is introducing the measures to limit the amount of money that people can borrow to buy a home.

The new mortgage rules mean that most house buyers will have to have a 20 per cent deposit when applying for a home loan. The regulations come into force on January 1st.

In addition, it has also decided that just one-fifth of new mortgages should be issued above a level of three and a half times income