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Bank of England Could Increase Powers to Avoid Housing Bubble

The Bank of England could get new advisory powers to intervene in Britain’s Help to Buy scheme, aimed at freeing up mortgage lending, if there are signs it is creating a housing bubble.

Critics fear the scheme is stoking an unsustainable housing boom, and the move by U.K. finance minister George Minister is seen as an acknowledgement that Help to Buy might have to be pared back if prices rise rapidly in London and the south-east of England.

Under the proposals the BoE’s Financial Policy Committee (FPC) will conduct an annual review of the housing sector every September starting next year, after Osborne had originally said the Bank would look at the scheme at the end of its lifespan in January 2017.

The central bank would also be able to recommend a cap on properties eligible for the mortgage plan, currently set at £600,000 ($966,600), to reduce its availability in London where house prices are 8 percent above their 2007 peak.

via CNBC [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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