EOIN BURKE-KENNEDY and PAMELA NEWENHAM

Fianna Fáil finance spokesman Michael McGrath has called on the Central Bank to undertake a review of its controversial mortgage rules now rather than wait until the summer to avoid a prolonged period of market disruption.

The Central Bank's new governor Philip Lane has promised to review the current raft of mortgage lending restrictions in six months.

His comments in an interview with The Irish Times mean mortgage applications throughout the spring and early summer - the busiest time for house sales - will continue to be carried out under the current rules.

Prof Lane said the rules could be tightened or loosened and that he remained open-minded at this point.

However, Mr McGrath maintains a six-month wait for the review would have a corrosive effect on an already sluggish market.

“Given the time it takes to assess submissions and implement any revisions decided upon, it is likely to be the end of the year at the earliest before any substantial changes are made,” he said.

“There is a very real risk that this will result in the already sluggish mortgage market grinding to a halt as potential buyers and sellers wait to see the impact of any new regulations.”

Mr McGrath said his party want the Central Bank to examine the potential of allowing 25 per cent of the deposit requirement for a first-time buyer be met by taking in to account rent payments over the previous three years.

Sinn Féin finance spokesman Pearse Doherty urged caution saying the Central Bank should “tread carefully” to not give any impression that the spirit of the rules could be undermined.

“It was always conceived that these reviews would be monitored and altered as the evidence dictated,” Mr Doherty said.

He said Sinn Féin was “acutely aware” of the immediate impact the rules have had on first time buyers and young families wishing to move on to a more suitable home for growing families.

“Review of the rules is welcome and sensible but I hope the Central Bank treads carefully and does not give any hope to those parties who have learned nothing and are calling for a return to the politics and economics of the bubble,” he said.