Irish central bank to cap loans to home buyers

Dublin

IRELAND'S central bank plans to cap how much banks can lend home buyers to prevent rebounding house prices from turning into a fresh credit-induced real estate bubble six years after the nation's property crash.

The regulator proposed that no more than 15 per cent of future loans to owner-occupiers be for more than 80 per cent of a property's value, according to a consultation paper published on Tuesday. It's seeking to restrict loans in excess of 3.5 times borrowers' income to no more than 20 per cent of new loans.