The limits should be flexible

[Brendan Burgess]

The Central Bank is worried about the market overheating, so they bring in the 80% LTV rule.

This might be appropriate now, but it may not be appropriate at other times.

If house prices fall and building stops, maybe they will need to allow higher LTVs to get things going again. Likewise if a bubble develops despite the 80% limit, perhaps they might need to reduce it to 70%?

 

[Steven Barrett]

They aren't trying to stop a bubble per se, just to reduce the chances of one and the impact it would have if one happened. I do not think they would reduce the LTV requirement to 70% as it would probably exclude 90% of people in the country from buying a home and first time buyers would be out of it completely.

Let's hope that the measures are successful and bring some stability to house prices instead of the wild fluctuations that we have seen for the last 15 years.


Steven
www.bluewaterfp.ie

 

[Brendan Burgess]

OK, I see from Page 2 of the Consultation Paper, that the limits are intended to be flexible.

The different thresholds could be adjusted in the future if this seems warranted by evolving circumstances.

 

[Brendan Burgess]

They say this again on Page 20 of the Consultation Document:

It may be necessary to adjust any or all of these parameters in response to
economic, market, or other developments in due course. It is envisaged that such adjustment could be made without a lengthy process of consultation.