IDEAS home Printed from https://ideas.repec.org/a/eso/journl/v53y2022i4p223-260.html

Back to the Future? Macroprudential Policy and the Rebirth of Local Authority Mortgages in Ireland

Author

Listed:
  • Conor O'Toole

    (Economic and Social Research Institute and Trinity College Dublin)

  • Rachel Slaymaker

    (Economic and Social Research Institute and Trinity College Dublin)

Abstract

The global financial crisis heralded a new era of macroprudential mortgage regulations such as loan-to-value and loan-to-income restrictions. Such measures safeguard the financial system, but can lead to credit access difficulties, in particular for first time buyers. In this paper, we examine the introduction of a direct public mortgage, the Rebuilding Ireland Home Loan (RIHL), which aims to address these difficulties in Ireland. We use new unique granular microdata for applications to the scheme to explore the relationship between households applying to the scheme and the broader commercial market. We show that RIHL applicants, particularly those in urban areas, are under-served by the commercial market as they cannot borrow sufficient amounts due to the regulatory framework. RIHL enables these lower to middle income applicants to access mortgages and thus directly targets the externality from the regulations. We argue these public loans bridge credit gaps while ensuring the commercial banks are subject to strong macroprudential rules.

Suggested Citation

  • Conor O'Toole & Rachel Slaymaker, 2022. "Back to the Future? Macroprudential Policy and the Rebirth of Local Authority Mortgages in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 53(4), pages 223-260.
    • Handle: RePEc:eso:journl:v:53:y:2022:i:4:p:223-260
    as

    Download full text from publisher

    File URL: https://www.esr.ie/article/view/2097/747
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Humes, Harry & Barrett, Michelle & Walsh, Brendan, 2024. "Effects of new residential developments on local healthcare demand and workforce: evidence from primary and acute public hospital care in Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS181.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eso:journl:v:53:y:2022:i:4:p:223-260. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aedin Doris (email available below). General contact details of provider: https://www.esr.ie .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.