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Mortgage rules ‘working well to keep house prices in check’

New research by ESRI found that the average loan size would be 8% higher without the current Central Bank controls which “would have a follow-through effect on house prices”.

The rules that govern the amounts that mortgage borrowers can raise are based on the value of the property and on their income. They were put in place six years ago as the economy started to recover from the disastrous banking crisis and the bursting of the property bubble created by uncontrolled credit. 

Professor Kieran McQuinn of ESRI said the report showed that the mortgage controls were working well to break any potential link for credit to refuel house prices. 

Its estimated total construction output remained unchanged at €23bn last year, despite the impact of Covid. Output in 2021 is forecast to fall to €20bn.

“In 2020 we lost 15% of the year due to Covid and, at the moment, it looks likely we’ll lose 25% of 2021,” he said. 

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