The Institute of Professional Auctioneers & Values (IPAV) have made a pre-Budget submission urging the government to relax mortgage lending rules.

Written by economist Jim Power (pictured), the submission argues that enabling those earning up to €60,000 to borrow up to 4.5 times income, as opposed to the current 3.5 times income, would bring some equity to the market and give hope to a large cohort of the younger generation.

In addition, long-term fixed rate mortgages should become the norm in order to protect borrowers from short-term interest rate volatility, according to the paper.

The submission says that while mortgage regulations are sensible and prudent, adjustments are required when the rules are having negative unintended consequences.

Power said: “It is now clear that the regulations as currently constituted are effectively locking those on average incomes out of the home-ownership market.

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“In an environment of historically low mortgage interest rates, prospective buyers on average incomes, and even those on relatively high incomes in some parts of the country, cannot aspire to home ownership and are being forced into a rental market that is expensive and not functioning properly.

“Facilitating home ownership for younger people who aspire to home ownership would take pressure off the rental market by freeing up rental properties, ease rents, and alleviate the growing pressure on the Housing Assistance Payment (HAP).”

IPAV Chief Executive Pat Davitt said: “The advent in recent months of greater competition in the mortgage market now means that a mortgage can be secured for up to 30 years at a relatively low fixed rate for the entire period of the mortgage. Those on average incomes are missing out and their future financial security is at risk.”

The submission also called for other measures, including a reduction in the VAT rate on new housing from 13.5pc to 5 per cent for owner-occupiers and incentives to bring vacant properties onto the market.