Date Released: 20 January 2015
SIPTU General President, Jack O’Connor, has called on the Central Bank not to proceed with plans requiring homebuyers to have a 20% deposit in place before being approved for a home loan.
According to reports, the Central Bank is due to decide next week whether or not to proceed with the controversial plans to change the loan-to-value (LTV) ratios which banks apply for home loans and to require lenders to impose an income threshold of 3.5 times earnings when considering mortgage applications.
Jack O’Connor said:
“If implemented as currently envisaged, these plans would put home ownership beyond the reach of thousands of individuals and couples. They would in fact make it the exclusive preserve of the better-off, those able to access inherited wealth and of serial investors. Many of our members have expressed concern about the impact of this proposal on them, or their children, and their chances of getting on to the property ladder.”
“They are not designed to ensure viable lending practices but to protect banking investments. They are socially regressive and would serve to exacerbate an already severe housing crisis.
“They would also place an intolerable burden on individuals and couples planning to buy their own home at a time when average hourly earnings, according to the CSO, are still falling - down 1.4% in the year to last October.”
“They would supress domestic demand and risk undermining the fragile economic recovery that is currently underway. 2014 saw personal consumption making its first positive contribution to growth in Ireland for seven years. Retail sales have been rising since Autumn 2013 but this could quite easily fall away on the back of these measures,” Jack O’Connor said.