Dáil Éireann Debate, Wednesday - 1 April 2015
53. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which provision will be made to ensure that first time house buyers, or those currently without a family home, are not priced out of the market by investors; the extent to which provisions already in place to assist first time buyers continue to remain effective; and if he will make a statement on the matter. [13589/15]
View answerAs the Deputy will be aware, the Central Bank of Ireland has put in place new macro prudential regulations for residential mortgage lending. These regulations provide that, in respect of mortgage for a principal dwelling, first time buyers will be subject to a maximum mortgage LTV of 90% for a property valued up to €220,000, and subject to an 80% LTV on any excess value above that amount. For non-first time buyers, a mortgage will be limited to 80% of the value of a principal dwelling house.
However, investors who wish to purchase a buy to let property will have to meet a higher deposit threshold when borrowing from a bank to fund the purchase. Such borrowers will be subject to a loan to value ratio of 70% meaning that they will have to have 30% deposit in order to obtain a mortgage on a buy to let property.
Additionally the Deputy may wish to note that, in Budget 2015, I announced a number of measures to support a functioning housing market. In particular, in order to support first time buyers to save towards a deposit for their first home, DIRT will be refunded in respect of savings up to a maximum of 20% of the purchase price. This measure will run until the end of 2017.
