The Bank of Portugal is considering “making it more difficult” for would-be homebuyers to get mortgages.
The reason, say reports, is that the property market is becoming overheated, with too much easy access to credit.
BdP is “concerned about the pace of lending”, says Idealista property website, “and has already warned banks to avoid exposing themselves to a future crisis”.
On the table is an “increase in requirements” before loans are granted “namely asking for more guarantees”, explains Diário de Notícias.
BdP’s latest report on financial stability cites the risks that developments in the property market could have on the economy if measures are not taken – particularly as so many Portuguese families remain saddled with debts.
The way ahead is also likely to see changes the time-period for loans, said DN, quoting Portugal’s “longest maturities” (approaching 40 years) when it comes to the Eurozone average.
BdP’s “reasons for concern” piqued this year with the “strong increase” (around 40% on the same period last year) in demand for home loans.
Says DN, the percentage of family-financed housing transactions increased to 45% from a minimum of 20% in 2013. In 2009, the value was 65%.
“In this context, it is important that financial institutions base their lending decisions on adequate analysis of clients’ debt service capacity, particularly in more adverse macroeconomic and financial conditions”, said BdP.