The central bank of Ireland is rumoured to be interested in imposing loan to value limits, as well as loan to income limits, on mortgages. The objective here, it appears, is to try and cool down the housing market in Dublin.
A big part of the problem in the Dublin market, which is going gangbusters, is a shortage of supply. Lots of reasons given for this shortage of supply, such as the cost of house building is still too high relative to what can be achieved, the lack of serviced land, the willingness of banks to lend working capital for property development etc. Be that as it may, the supply-side issues will take time to work through. Will loan to value limits work? Continue reading