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TODAY'S OTHER NEWS

Carney warns housing market: "Brexit conditions will be difficult"

The Bank of England’s governor is warning future mortgage borrowers who buy homes that “conditions will be difficult” as a result of economic volatility following the Brexit vote.  

“If you are taking out a mortgage, at some stage, during the life of that mortgage, conditions will be difficult. So you want to be sure, as a household or an individual, that you can repay that mortgage - you don’t want to lose your house or flat” he says.

Carney also says future interest rate changes may be downwards - which in theory would be good news for would-be buyers - but he also warns buyers to avoid high levels of debt. 

Giving the Bank of England’s six-monthly Financial Stability Report, the governor says banks will temporarily not have to set aside more capital because Brexit’s economic risks are already "materialising". This releases £150 billion for lending, starting straight away. 

"It means that three-quarters of UK banks, accounting for 90 per cent of the stock of UK lending, will immediately - immediately - have greater flexibility to supply credit to UK households and firms" says BoE governor Mark Carney, but he warns that this should be called upon only if further uncertainty grips the economy.

Meanwhile there have been more warnings over the market within the property industry. 

Alistair Jeffery, executive chairman at Bluestone Group - a mortgage lender - says house price growth is "likely to moderate, particularly in London and the South East, reflecting the markedly lower consumer sentiment, weaker levels of inward investment, and potentially the first signs of voluntary repatriation of EU nationals".

ESPC, the group of selling agents in east central Scotland, says the week after the referendum saw an immediate slowdown in Home Report requests - the first step before someone puts their property up for sale north of the border. 

In the last three months prior to the EU referendum, sales volumes were down by 5.6 per cent across east central Scotland compared to the same period last year. 

  • Matt Faizey

    Ever further down the rabbit hole.

    Concerned you might be in an unmanageable debt bubble?

    Great News!

    Conditions have been further massaged to make borrowing easier. WooHoo!

    Let's solve the slowing economy by providing more credit to those already drunk on it.

    The World's central banks taking us deeper and deeper into this credit experiment.

  • Simon Shinerock

    All currencies are 'fiat' based purely on confidence, there is no real alternative, we gave gone too far. Instability is built into the system, central banks need to be ever more creative to stay ahead of the markets. A new form of stability will be required if a total meltdown is to be avoided

    Trevor Mealham

    We'll see new models created, we may even see more FTB's return if prices drop and financially perfect FTBs take advantage of low rates. Poss good to release upward stock.

    Secondary owned properties will be hit mostly by the SDT (3%) hit. Investors will want 5% further off to account for the 3% + less landlords buying if not more.

    Lease Options allow for the 3% avoidance if strongly geared into a contract where builders may secure, revamp and sell on rights without even purchased.

    Its mainly bigger biz that will be hit, opening opportunities for smaller biz's to adapt their models

     
  • Mark Hempshell

    “If you are taking out a mortgage, at some stage, during the life of that mortgage, conditions will be difficult. So you want to be sure, as a household or an individual, that you can repay that mortgage - you don’t want to lose your house or flat”

    I've never thought I was clever enough to be Governor of the BofE. But reading this, do you know what, I think I probably could be.

  • Terence Dicks

    My thoughts exactly Mark.

  • Terence Dicks

    Trevor, we already are seeing more FTB's entering the market.

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