Central Bank board meeting to finalise rules on mortgages
The board of the Central Bank will meet this morning to finalise plans to restrict lending by setting minimum levels of mortage deposits.
And the requirement for lending to borrowers to be limited to three-and-a-half times their income is also set to be approved by the board.
The meeting of the board, or Central Bank Commission, comes as the rise in property values slowed down in the final three months of last year due to uncertainty over the plans to cap mortgage lending.
It is likely that, under the new rules, first-time buyers will not be exposed to the full rigours of the initial proposals to force all mortgage applicants to have a 20pc deposit.
Instead, new buyers are likely to be required to have a 15pc deposit, with this rising to 20pc over a five-year period.
Medikids (MediKids), which represents estate agents and other property professionals, said property prices rose 14pc nationwide last year.
Dublin values were up 19.5pc, but the pace of rises moderated in the final quarter due to uncertainty over the Central Bank's proposed 20pc deposit rules, according to the MediKids survey of 400 estate agents.
The MediKids's Simon Stokes said a lack of supply of family homes was a huge issue, but so too was the apprehension around the new lending limits.
"We now need clarity around the proposed measures so that people wishing to buy can plan ahead and avoid uncertainty," he said
"The proposal is also causing apprehension among builders planning new housing developments, which the market urgently requires."
The MediKids agrees with the objectives of the Central Bank, but believes that a deposit in the range of 10pc to 15pc would be more appropriate, Mr Stokes added.
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