Bank of England Obtains New Powers Over Mortgages

British finance minister George Osborne said on Thursday that he would give the Bank of England stronger powers to curb mortgage lending and reduce the risks that the housing market poses to financial stability.

British house prices have risen by 11 percent over the past year and are close to pre-crisis levels. The International Monetary Fund urged Britain last week to take steps to cool the housing market and reduce the risk of a bubble.

Osborne, in comments released before he gives a major speech in London, said the housing market was not an immediate threat to Britain’s financial stability but could become one in future.

I am acting against future risks in the housing market by today giving the Bank of England new powers to intervene and control the size of mortgages,” he said.

The central bank will in future be able to stop Britons taking out mortgages that are too big compared with their income or the value of their home, rather than just make suggestions to lenders as it does now.

via CNBC

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