DUBLIN -- Irish Life & Permanent's bank permanent tsb will no longer offer 100 percent mortgages to home buyers due to a slowdown in Ireland's housing market, a permanent tsb spokesman said on Thursday.
An end to Ireland's decade-old property boom, when prices quadrupled, has put the brakes on years of rapid economic and jobs growth.
Some companies involved in supplying materials to the construction industry warned this month about an impact on earnings this year due to softer growth prospects for the sector.
A permanent tsb spokesman said it will cut the maximum amount it will offer for residential mortgages to 92 percent from 100 percent from the end of March.
It began to offer the service over two years ago, spurred by a booming market and competition from rivals.
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"We think this is a prudent approach to the current market circumstances," he said. "The era of significant (house) price increases has come to an end."
The spokesman said permanent tsb would also cut the maximum loan it will offer to investors looking to buy homes to rent, to 80 percent from 90 percent. "It is reflecting a changing mortgage market place in Ireland," he said.
House prices in Ireland are set to fall 7.0 percent in 2008 and are only expected to grow by 0.5 percent next year, according to the latest Reuters poll of economists.
Last month Irish Life predicted loan growth at permanent tsb would slow to mid to high single digits in 2008.
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