The Governor of the Central Bank says a decision on whether a 20 per cent deposit will be required to secure a mortgage will be made in the coming days.

The Central Bank has carried out a public consultation on the matter, which Patrick Honohan says will inform their decision.

The Bank suggested that prospective buyers should have one fifth of the cost of a house saved before being granted a mortgage for the rest of the value.

Mr Honohan said a decision will be announced shortly and the Central Bank has been “examining the commentary and the submissions to our consultation document very carefully.”

“We’re trying to see what can we do to achieve the goals of waht we set out - are there any elements which need to be relooked at - and we’re going to announce conclusions very shortly,” he added.

Critics of the plan say this will be impossible for ordinary savers, particularly in the capital. The proposals have been criticised by senior civil servants at the Department of Finance.

Ann Nolan from the Department of Finance says the rules would mean the majority of first-time buyers would be unable to buy a home: “You can’t have a position where people who are earning their own money, renting a long term property, paying more than the mortgage so  have a proven track record of paying the sum, can never on the property ladder. I don’t think that’s socially acceptable,” she said.

“I don’t think it should be a position where the only think who can get on the property ladder are those people whose parents can give them a big lump sum, but there is a balance and I certainly wouldn’t like us to go back over 90 per cent and I wouldn’t have a problem with reducing or reducing in certain cases below that,” she added.

Newstalk's Ian Guider discussed the issue this morning:

The shortage of homes in Dublin is pushing up supply and prices - and will cause further problems when the 20% deposit requirement comes in, according to Ronan Lyons.

The economist told Shane Coleman this morning that the lack of supply is what's driving up values:

"The affordability thing is not about credit, if you increase credit the only thing you do is push up house prices. If houses are not affordable, it's because there are too few of them and that's particularly true in the Dublin area at the moment."

""It looks like Dublin, between 2010 and 2020, needs about 100,000 new homes and is on course to get maybe 10 or 15,000 of those 100,000".

You can listen to his full interview here:

Originally published 19/01/2015