The war of words over the Central Bank’s year-old mortgage rules has flared again, as bank governor Philip Lane said there will be no early review, even as auctioneers launched a fresh broadside calling for them to be changed immediately.
Mr Lane yesterday said the bank was opening a consultation and inviting written submissions on the possible effects of the home loan rules on the economy and the housing market.
However, he reiterated that the bank was not for turning on the wisdom of the restrictions, saying its review later this year could lead to the rules being “tightened, loosened or left unchanged” but not scrapped altogether.
The rules are part of the bank’s “macro-prudential toolkit” and are designed to prevent any repeat of over-lending which contributed to the banking disaster eight years ago. Industry groups have been vociferous in demanding reform because they say the restrictions are only making matters worse.
Pat Davitt, chief executive at IPAV, an industry group of 1,000 auctioneers, yesterday said the mortgage rules were locking too many people out of the property market.
“Even if you save for a deposit, you are caught by the income rule,” said Mr Davitt. The rules would hit even harder when the supply of new homes finally comes on stream.
ESRI housing expert David Duffy told the Irish Examiner the rules were “probably” having some sort of impact, but their direct effect was likely less significant than other factors weighing on housing supply.
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