EASING OF CENTRAL
BANK’S RULES WILL AFFECT HOME PURCHASERS
On 27 January 2015 the Central Bank of Ireland first announced regulations for residential lending by regulated financial services providers in the Irish market. These “Macroprudential Rules” came into force on 9 February 2015 and have significantly impacted on home purchasers and conveyancing solicitors.
The results of the first review were announced on the 23 November 2016 with a number of amendments proposed to come into force on 1 January 2017. These follow the introduction of the Help-to-Buy (HTB) scheme designed to assist first-time home buyers with obtaining the deposit required to purchase or self-build a new house or apartment to live in as their home.
Key features include:
• The ceiling on the loan to value (LTV) ratio for all first time home buyers will be set at 90 per cent. Presently the ceiling is 90 per cent for loans up to €220,000 and 80 per cent for the balance of loans over €220,000.
• The requirement for buy-to-let borrowers to have a 20% deposit continues to apply to second and subsequent buyers
• The loan-to-income ratio of 3.5 times stays.
Author Bio: Natasha Dunne is a Partner in Thomas Barry & Company, a legal practice based in Dublin. She regularly writes on legal issues.