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Sam Boal/Photocall Ireland

The IMF is a fan of the Central Bank's mortgage rules

But it says that reform of the rental market is needed.

THE INTERNATIONAL MONETARY Fund (IMF) has warned that efforts to slow down Ireland’s property market should be done gradually.

In a report on how Ireland, Spain, Denmark and the Netherlands are recovering from the property crash, the IMF voices its support for the proposed plans to cap loan-to-value and loan-to-income rates for new mortgages.

It also praises the Central Bank for their “flexibility for exceptional cases in which exceeding the limits may be appropriate”.

The paper says that falling house prices and massive consumer debt in the four countries is suppressing spending, which in turn is acting as a drag on the economy.

It does, however, note that restrictions could be based on geographical lines, with stricter limits in places where recovery is stronger.

It also says that reform of the rental market, including mortgage to rent conversions for borrowers in arrears, focused building of rental homes and using ghost estates and vacant units.

Aaron McKenna: The Central Bank mortgage restrictions make great sense – here’s why

Read: Bubble buster: Homebuyers face 20% deposits as banks hit with tighter controls

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