The Professional Insurance Brokers Association (PIBA) says lenders are rejecting between 60% and 80% of mortgage applications.
The Association says first-time buyers and the self-employed were being hit-hardest by the credit squeeze.
The body also found that over 77% of brokers said the situation was “much worse” than last year, while 19% felt there was no change.
Councillor Jimmy Harte says there are properties that can be purchased for half the price of what they were in 2006 here in Donegal, but good clients, trying to buy their first property are being turned away by the banks.
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