The Central Bank has announced a major change to its mortgage deposit rules for first time buyers.

It has confirmed that the rule requiring first-time buyers to have a deposit of 20%, on properties above a certain value, will be scrapped.

It means that a first-time buyer will now only require a deposit worth 10% of the entire value of a property, regardless of its price.

Governor of the Central Bank Philip Lane made the announcement this afternoon;However the 20% deposit rule will continue to apply to second-time and subsequent buyers. The new rules will come into effect on January 1st, 2017.

Philip Lane says part of the reason for changing the rule was to simplify it;

Worked example showing impact of HTB & softer lending rules on FTB buying €250k new property. Deposit falls from 11.2% to 5% of price pic.twitter.com/STRD9BLFO8

— John McCartney (@JPMMcCartney) November 23, 2016

John McCartney, director of research with Savills says the change in rules will drive up house prices;