Central Bank’s house price action ‘was premature’

The Central Bank’s attempt to prevent another property bubble was introduced too soon and could have adverse effects on housing supply and the rental market, according to the ESRI.

The Central Bank introduced rules in February that limited banking lending to 80% loan-to-value mortgages for 85% of overall mortgages issued over a 12-month period. A loan-to-income cap of three and a half times’ salary was also introduced.

However, in a modification to the original proposals, first-time buyers are allowed take out a 90% deposit for the first €220,000 of the overall value of the mortgage.