Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

First, the Central Bank is independent. It brought forward these macroprudential rules on lending for house purchases because it was aware of how the property bubble had crashed the economy previously. It was also aware of the inadequacy of Central Bank and Financial Regulator action at the time, which is well recited. One can see why the bank was anxious that there would be no repeat.

My views were reflected in the submission made by the Department of Finance during the consultative process, the outcome of which has been published. I hope they were influential in providing a little more space for first-time buyers. The LTV scale does not jump from 80% to 90% in one go. The figure of €220,000 applies at the 90% rate and the scale then begins to slide for properties above that threshold. Up to a house worth €1 million, one would not be down to an 80% LTV ratio. It would work out at a maximum mortgage of 82%. There is a long sliding scale before one arrives at the 80% LTV level. I hope it will work.

It must be remembered that issue this is subject to ongoing review by the Central Bank. It is the bank's announcement and fully within its rights to make it. Its job involves the macroprudential care of the economy.

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