Mortgage rules figures ‘point to supply as the real problem’ – Doherty
Sinn Féin Finance Spokesperson Pearse Doherty TD has welcomed the publication of data on the use of exceptions under the new mortgage rules as he had requested from the Central Bank. The data shows that the banks used only 30% of the permitted 35% leeway allowed. He said that the real story in the data is that supply remains the issues not demand and that this new evidence should make the government think again about a ‘help to buy’ scheme.
Deputy Doherty said:
“I am happy that these figures have finally been released after I raised this issue with the Central Bank and Minister for Finance. The idea that the Central Bank could ask for evidence based submissions without this crucial piece of evidence was absurd. I am glad that we now have a picture of how these rules are working.
“By using only 30% of the permitted leeway, the banks are not using the full leeway available to them. In fact, that 5% would mean that an additional €129m could be loaned outside the caps.
“It is very noticeable that for First Time Buyers the average loan to value has not changed dramatically. It is now 78.7% for those that fall within the rules compared to 80.7% for those that fell outside. That is only a minor change and when we consider that there is another 5% of lending that could potentially be used outside these caps the effect of these rules on First Time Buyers is quite limited.
“Overall, the picture is one of supply still being the issue. In light of this data, the government must take second look at the proposed help to buy scheme. There is simply no evidence that these rules have created a need for such an expensive scheme.”