Imposing a loan-to-value limit on housing company loans would only affect a share of construction finance
Koskinen, Kimmo; Voutilainen, Ville (04.05.2021)
Volyymi
95Numero
1/2021Julkaisija
Bank of Finland
2021
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-202105251252Tiivistelmä
Housing company loans are contributing to household indebtedness and are changing the composition of household debt. Housing company loans can also incentivise residential property investors to become highly leveraged. Imposing a loan-to-value limit of 60% on housing company loans would mitigate the issues associated with large housing company loans and make it easier to assess their risks. The impact of a loan-to-value limit would largely fall on owner-occupied housing output. Housing company loans are generally not used to finance the construction of rental housing. Imposing a loan-to-value limit on housing company loans might increase the number of pre-sales required by small construction companies or raise their borrowing costs.
Julkaisuhuomautus
The accessible version: https://www.bofbulletin.fi/en/2021/1/imposing-a-loan-to-value-limit-on-housing-company-loans-would-only-affect-a-share-of-construction-finance/