Bank may have already made lending tougher

Speculation is mounting that yesterday's meeting of the Bank of England's financial policy committee may have pressed the button to impose further restrictions on mortgage lending - but no one will know for sure until June 26.

There is always A delay between the quarterly FPC's meetings, the latest of which was yesterday, and its public announcements about its actions.

The committee's options - in support of Governor Mark Carney's warnings about the dangers of an over-heating market - include putting a minimum limit or percentage on down payments for all residential transactions, making banks hold more capital against mortgage lending, and toughening affordability tests even further beyond those new rules introduced under MMR.

Representatives of mortgage lenders say there is no need for further restrictions as mortgage applications are well down and house price growth may be a temporary phenomenon.

Peter Williams, executive director of the Intermediary Mortgage Lenders Association, says: With house prices continuing to climb we are staring at a glaring mismatch between a rampant housing market and subdued mortgage activity that needs handling with care.

Noises from the Bank of England ahead of the FPC meeting suggest the mood music is for more restrictions. The Deputy Governor for Financial Stability, Jon Cunliffe, has gone on record saying it would be dangerous to ignore the house price surge of the first half of the year; an external member of the BoE's monetary policy committee, Dr Ben Broadbent, said last week that housing is a risk to the economy.

We will all know in eight days from now.