The Irish Central Bank is coming under intense political pressure to radically overhaul its restrictive mortgage lending rules, according to a report in the Irish Independent.

Political parties in Ireland are demanding significant changes to the strict conditions on mortgage deposits which have made buying a house near impossible for ordinary workers.

First-time buyers are being frozen out of the housing market due to high rents coupled with the massive mortgage down payments they are forced to save due to the Central Bank rules.

Young families hoping to trade-up are also being crippled by the lending conditions which mean they have to save a huge 20% deposit on any home they hope to buy.

Fianna Fail is calling for the rate for first-time buyers to be slashed by a third if the house-buyer has a proven track record of paying rent for three years. The comprehensive 12-page document also insists the Central Bank should apply the same rules to people trading up as it applies to first-time buyers.

This would mean a family looking to buy a bigger home would have to save up 10% on the first €220,000 of the house price and 20% on the remaining balance.

In this scenario, a couple looking to trade-up to a house costing €400,000 would need a €58,000 deposit rather than an €80,000 down payment under the current rules.