THE NEW MORTGAGE rules are going to mean more renting and investors will take advantage of this by buying up more property.
That’s according to estate agents Savills who argue that the rules will not lead to a slowdown in house prices.
This, they say, is because many of the potential landlords entering the market are small-scale investors who will be competing for the same properties and homebuyers.
“By diverting demand into the rented sector, the new rules will lead to stronger rental growth,” according to Savills’s John McCartney.
“In time this will attract investors who will compete with everybody else to buy properties. Therefore the new measures will do nothing to soften house price growth by curtailing demand.”
The lending restrictions will force property buyers to come up with a minimum 20% deposit for home purchasers. For houses under €220,000, the deposit is 10%.
Figures this week showed that rents have shot up over the last year with the average monthly rent now €950. In Dublin, the figure is significantly higher at €1,350. There are fears that the mortgage restrictions will push rents to unsustainable levels.
Savills say they have seen a glut of small-scale investors entering the market, professionals seeking a fresh revenue stream as a landlord.
“A new breed of more professional, yield-driven landlords is flooding into the market,” said Graham Murray. “In fact this new generation of investors represented our biggest single group of buyers last year.”
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