Central Bank makes minor changes to lending rules

29 November 2017
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The Central Bank has broadly stuck by its lending rules with 20% of first time buyer mortgages now allowed to avail of income multiples >3.5 times income and 10% of second time buyers being allowed to borrow over the limit. Prior to this change there was no separation of the overall exemption limits between buyer classes. One feature of the change is the recognition that First buyers are more likely to have rising income levels than second time buyers.

With less second time buyers being allowed to exceed the limit, it is possible that this may push sellers to place their properties on the market sooner rater than later, increasing supply and having a negative impact on second hand prices.

An interesting feature of the commentary is a warning that there are risks in the market to house price growth, including the prospect of rising rates, Brexit and the welcome addition of an increasing supply of new houses. Sellers will bear this in mind when planning the timing of their house sales.