New mortgage rules ‘will send rents spiralling’
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December 10,2014|
PROPOSALS to limit mortgage lending would mean rents would keep rising, auctioneers have warned the Central Bank.
This would make international vulture funds the big winners because they would see value in continuing to snap up rental property portfolios.
Large numbers of potential first-time buyers would be forced to rent against their will because they wouldn’t be able to buy, the Institute of Professional Auctioneers and Valuers (IPAV) said.
In a submission to the Central Bank ahead of yesterday’s deadline, the IPAV said the new lending proposals would stymie banking competition here.
It comes as Government wants the Central Bank to ease the introduction of strict rules on mortgage borrowing by bringing in the changes gradually.
Now the IPAV says moves would push up rents further. Rents had already gone up 20pc in the past two months, the auctioneers said.
Pat Davitt of the IPAV called on Nama and banks to stop selling property portfolios and repossessed in blocks of units.
“The sale of these blocks of apartments will only give their foreign owners the opportunity to increase rents as they have done in the past two months by at least 20pc.”
He claimed that 20pc deposit rule would make banks compete less for mortgages.
“Imposing an 80pc LTV (loan-to-value ratios) will, in one fell swoop, stymie international competition in the Irish market. It will leave consumers exposed to what could be considered a banking cartel.”
Irish Independent