Dáil Éireann Debate, Tuesday - 6 October 2015
255. Deputy Dominic Hannigan asked the Minister for Finance if he will provide an update on the impact on first-time buyers of the new mortgage rules that the Central Bank of Ireland introduced earlier in 2015; and if he will make a statement on the matter. [34284/15]
View answerThe Central Bank of Ireland, having regard to its mandate to safeguard financial stability, has put in place new macro-prudential measures for residential mortgage lending effective from 9 February 2015. These measures apply proportionate loan-to-value and loan-to-income limits to mortgage lending by regulated financial service providers in the Irish market. For first time buyers, a higher 90 per cent loan to value threshold on the first €220,000 of the value of a primary home property is allowed under the rules.
The key objective of these regulations is to increase the resilience of the banking and household sectors to the property market and to reduce the risk of bank credit and house price spirals from developing in the future. While the Central Bank is independent in the setting of such macro prudential measures, it should be noted that the Central Bank indicated from the outset that it would monitor the impact of the implemented measures ongoing basis, in particular with regard to achieving the stated objectives of the measures and monitoring any unintended consequences. As it indicated at the outset of this new framework, the Central Bank will review the implemented measures on an on-going basis, in particular with regard to achieving the stated objectives of the measures and monitoring any unintended consequences. This will require an ongoing evaluation of relevant data and information, including the particular data on residential mortgage lending that lenders are required to submit to the Central Bank under these macro new prudential regulations. Also, on a more general level, the Central Bank will also maintain a continuing research effort to evaluate macro prudential policy to help ensure its optimum deployment.
