Breathe a sigh of relief - Bank of England governor Mark Carney says there are no new measures which he has left to intervene in the housing market.
Carney, speaking to MPs at the Treasury Select Committee in the Commons yesterday, said it was necessary for the Bank's Financial Policy Committee to cap mortgages last month because it was not sustainable for house prices to continue rising faster than wages.
The governor explained that the 15 per cent cap on risky loans could be raised and the current cap on loans above 4.5 times income could be modified, but that we are not currently looking at additional measures.
However, he did reveal that the Bank is currently analysing individual banks and building societies to see if they could cope with a worst case scenario of a 35 per cent drop in house prices, sharply deteriorating unemployment levels, and a three year recession.
Carney spoke also about buy-to-let in response to one MP's query about whether there were sufficient constraints on mortgages in that sector of the market. Carney replied: We are well aware that buy-to-let is a safety value that may need to be released.
He told members that buy-to-let represented around 15 per cent of all mortgages, in line with long-term averages. He said there had been no shift in underwriting standards with most borrowers making deposits of around 25 per cent, again in line with historic averages.
Comments
Looks like we can rest easy...for now at least. I agree something needs to be done to ensure the stability of the property market but these changes already made just seem to be limiting people.