Bank of England To Limit Large Mortgages

The Bank of England signalled on Thursday that it would not impose draconian measures to cool the housing market unless house prices rise by more than 20% over the next three years.

Governor Mark Carney imposed the first limits on the mortgage market – restricting the amount that homeowners can borrow relative to their income and tightening the affordability tests would-be homeowners face when applying for a mortgage – but he acknowledged there would be no immediate impact on fast-rising property values.

“These actions should not restrain current market housing activity … these actions will have minimal impact in the future if the housing market evolves in line with the bank’s central view,” Carney said.

The governor said they would only bite “if there is sustained momentum in the housing market over the coming years and that’s accompanied by further sharp increases in high loan to income lending”.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
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