New research by Central Bank economists showing how long it takes first time buyers to save the required level of deposit to buy a home underlines the need for the Central Bank’s rules to be changed to take account of a person’s track record of paying rent, according to Fianna Fáil Spokesperson on Finance Michael McGrath.
Deputy McGrath commented, “It is incredibly difficult for any aspiring home buyer to save the required level of deposit while at the same time paying a market rent. With rents rising rapidly, the hope of owning a home is going beyond the reach of more and more individuals and families.
“In our submission to the Central Bank on the review of mortgage rules, we suggested that the rules be amended to take account of a person’s track record of paying rent. By paying rent over a number of years, a mortgage applicant has demonstrated a certain capacity to repay and this should be reflected in the rules governing how a mortgage application is assessed.
“The payment of rent can be taken into account in a number of ways. Our suggestion, for example, is that the current deposit requirement for first-time buyers be reduced by one third where the potential purchaser has a three-year track record of rental payments equivalent to at least 90% of their prospective mortgage.
“Allied to this, the government’s priority has to be on measures that directly boost the supply of new homes in the market. This can be achieved by improving the viability of building new homes, not just in Dublin but in population centres all over the country where demand for new homes exists.”