Friday 30 September 2016

Home loan rules must be reformed - urgently

Published 04/04/2016 | 02:30

'We understand the need for regulation. But under-supply in the housing market, and inflated rents, leave many people stranded.'
'We understand the need for regulation. But under-supply in the housing market, and inflated rents, leave many people stranded.'

Nobody wants a return of the property frenzy that ended in grief and hardship in 2008. Reckless lending was at the heart of that carnage. Economic recovery must include rules curbing the risks of replaying that horror.

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But the property sector is unduly stalled. The building industry, always a significant player in driving the economy, is operating way below par by pre-boom standards.

The regulatory authorities in Ireland did not operate effectively during the false boom that ended in tears almost a decade ago.

Now, the pendulum has swung back and the Central Bank has introduced tough home loan rules.

We understand the need for regulation. But under-supply in the housing market, and inflated rents, leave many people stranded.

Today, this newspaper brings you details of a report urging refinement - not fundamental change - to mortgage rules. It urges relaxation of deposit ratios, while keeping the ratio between income and the amounts borrowed.

It is time to seriously consider such changes.

Irish Independent

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