Plunging House Prices

As we all know, despite the recovery in house prices in Dublin and some of the rest of the country, house prices are still plunging in Moville.

And it could well get worse.

Currently lenders are insisting on a 10% down payment when people are buying a house.

They are also making offers to buyers of up to 4.75 times their annual salaries.

New Regulations

Now the Government are about to bring in new regulations in January which mean that lenders must take a 20% deposit..

They are also going to restrict them to offers of 3.5 times their annual salary.

This should help kill off the recovery in the housing market down south and make it even more difficult for people to buy houses in Moville.

It’s absolutely crazy and could seal the fate of the Government at the next election.

The Conservatives

The Conservatives in Britain are doing the very opposite and have been rewarded by a rise in the opinion polls to stand level with Labour there now.

Lenders were insisting on a 20% deposit there. The Government stepped in to guarantee 15% of it so that buyers only have to put up a 5% deposit now.

As a result the property market started to rise as first time buyers were able to get back into the market. The Government did this because they wanted there to be a feelgood factor helped by a rising housing market to go into the next election with in May 2015.

Irish Government

The Irish Government say that they are bringing in this 20% deposit thing so that there is no new housing boom.

However, it will keep the first time buyers out of the market and they are the lifeblood of the housing market. Those young people, getting married and settling down, will not be able to afford the deposit now.

It’s going to have the opposite effect from the UK. It is going to bring house prices down as there will be fewer buyers competing for the same amount of houses.

It should be good news for those letting out flats and houses.

The Last Boom

The last boom was caused by lenders giving 100% loans then 110% loans and then 120% loans to people who had shown no inclination of being able to save money.

Asking for deposits of 20% is too much. It’s when lenders start giving out 100% loans that the booms start. Asking for 10% deposits shouldn’t be a problem. There’s no housing bubble in the UK with just 5% deposits wanted.

The Government will have to go into the next election with no feelgood factor coming from the housing market. As there is a severe lack of a feelgood factor anywhere else that won’t be good for them.

These were crazy regulations to bring in. They should have set the level at 1o% or 5% for the deposit.

It will also choke off, even more, the construction industry as there will be less call for new houses to be built with fewer people able to afford them.