Ask the Experts: Are you in favour of the Central Bank's lending Control measures?
Published 23/01/2016 | 02:30
In general, we are in favour of Central Bank oversight and regulation of the banks and believe that lending rules are an important and effective tool in keeping control of the market.
However, in our opinion the limits as currently set are excessive and are causing unnecessary difficulties for viable purchasers. Particularly the ratio of earnings to loan value at 3.5 times is highly restrictive.
Marian McQuillan is the CEO of Quillsen, formerly Gunne Estate Agents and was previously a director of Purcell McQuillan Tax Partners.
We are broadly in favour as we do not want to revisit the days of reckless lending.
However, falling house prices are not a sign of success or affordability, they are falling in some areas because young people cannot qualify for a mortgage, and second-time buyers cannot afford to move out of houses in the €220,000 band.
It is now time to revisit the measures, consider raising exemption limits to the price of an average home, and to immediately allow second-time buyers to borrow 90pc up to €220,000, as it is their inability to move which has led to a lack of supply of affordable and suitable family homes.
Darina Collins is a director of and a founding member of the Real Estate Alliance, a partnership of more than 50 auctioneering firms. She is also a partner in REA O'Brien Collins, the Drogheda based general practice firm.
The Central Bank's new lending rules have been highly effective in addressing the issue of personal indebtedness and in dampening property prices, especially in Dublin.
Any measure that prevents the property market from overheating is positive.
However their sudden introduction did provide something of a shock to the market. We would have preferred if they had been phased in over a period of two years as this would have allowed buyers time to factor the new credit limits into their plans.
Patricia Byron is the director general of the Society of Chartered Surveyors Ireland which has 5,000 members working in the property and construction sector.
It is comforting to see that lessons from the past are being learnt in relation to banking regulation and financial stability.
Having said that, the measures are too restrictive and have been introduced too early in the recovery cycle.
Michael is the managing director of the Sherry FitzGerald estate agency group which has a 66 branch network including franchises, He has more than 26 years experience in the sector.