Professor Philip Lane:

These rules affect different groups quite differently. When one thinks about what happened in the mid-2000s when credit was more readily available, we know the disaster of people taking on too much debt. Again, the banks were offering these generous mortgages to them. However, we have to have a system which limits that risk. One way in which the sector will adjust is, essentially, the pricing of homes will moderate. There is much evidence, especially from the Irish situation, that when there is not a complete but a partial adjustment and when credit is less available, part of the adjustment over time will be that the bidding war on houses will be less intense. Accordingly, people will be able to buy houses at lower price than if credit were unregulated.