68% of Brokers would like to see softening of Central Banks mortgage lending rules


18th Aug 2016

The softening of the Central Bank’s mortgage lending rules remains a high priority for Brokers. According to the majority of them, if the Government was to tackle just one issue currently facing the Irish financial services sector it should be these restrictions. Protection specialist Royal London surveyed approximately 350 Brokers nationwide and found that 68% would like to see a modification of rules for certain buyers.

The Royal London survey asked: What measures would you most like to see the Government take in relation to Ireland’s financial services sector?

Respondents answered as follows:

  • Persuade the Central Bank to soften the mortgage lending restrictions
  • Reduce the Capital Gains Tax (CGT) & Capital Acquisitions Tax (CAT) rates / increase thresholds for individuals
  • Step in to regulate mortgage interest rates/ Standard Variable Rates
  • Step in and review regulation of insurers in Ireland to prevent another Setanta Insurance / Enterprise Insurance situation
  • Address issues around flooding and insurance

Joe Charles, Marketing Manager of Royal London explained: “It probably comes as no surprise to you that a change to the Central Bank lending rules tops Brokers’ ‘wish list’ for change, at 35%. After all, you’re dealing with customers every day who are impacted by them.

What is very interesting to note is that a significant number of you (25%) felt strongly about CGT & CAT rate issues, citing this as the issue that they would like to see the Government address. Recent media commentary suggests that the Government is planning to look at increasing the thresholds for Inheritance Tax between a parent and their child from €280,000 currently to potentially more than €500,000.Our survey results show that this would be a popular move.”

Other suggestions from respondents were as follows:

  • Scrapping the Government levy on health insurance plans – currently €403 a year for advanced adult policies
  • Continuing to safeguard the tax relief on pensions – currently up to 40%

With a review of the mortgage lending limits due by the Central Bank later this year, the Royal London survey also asked whether or not Brokers believe the rules as they currently stand should remain: Do you think that the new Central Bank mortgage lending rules are appropriate and required?

Respondents answered as follows:

  • Generally yes, but not for First Time Buyers
  • Generally yes, but not for First Time Buyers in more expensive areas such as Dublin
  • No they should be scrapped
  • Yes
  • Generally yes, but not for those looking to trade up with no equity

Joe commented on the findings: “By and large our survey revealed that while most Brokers are satisfied that rules need to be in place, the majority would like to see some modification depending on the buyer profile. Nobody would want to see a return to the runaway house prices and extremely easy access to credit of the boom years, but the majority (68%) of the Brokers surveyed think some modification is required, showing there is a clear appetite for some changes to the Central Bank restrictions.”

Royal London – 18th August 2016

Royal London


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