11:54 AM, 26th June 2014, About 7 years ago 12
The Bank of England’s Governor, Mark Carney has today held a press conference to outline new plans to stabilise the housing market under the Financial Stability Report.
The housing market is the biggest single domestic risk to the UK’s economy, and the Bank of England is seeking to encourage long term price stability. Mr Carney was keen to stress that there is no imminent threat, but household over indebtedness due to rising house prices could threaten disposable income/spending power and hence economic recovery. This is why the last recession was so deep and lasted so long.
Current average household debt stands at 140% of income and mortgages account for 80% of this debt being by far and away the largest liability. Mortgages are also the largest single asset class for the UK’s Banks and Building societies.
The Bank of England will therefore:
If you have a mortgage agreed yesterday then today it should still be OK under the new rules.
These measures are not designed to have an immediate affect, but are geared to stop any future overheating by limiting borrowing power without needing to increase interest rates.
The Governor said that current Monetary Policy (includes interest rates) does not need to be diverted due to a single sector specific issue. Raising interest rates to curb borrowing would only hurt household spending and hence slow the economy. This way we avoid economically the tail wagging the dog.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Advice and implementation provided by a practising Barrister-At-Law with £10,000,000 of Professional Indemnity InsuranceBook Now
Previous ArticleDo I buy a freehold maisonette?
|“Account”||means an account required to access and/or use certain areas and features of Our Site;|
|“Cookie”||means a small text file placed on your computer or device by Our Site when you visit certain parts of Our Site and/or when you use certain features of Our Site. Details of the Cookies used by Our Site are set out in section 13, below;|
|“Cookie Law”||means the relevant parts of the Privacy and Electronic Communications (EC Directive) Regulations 2003;|
|“personal data”||means any and all data that relates to an identifiable person who can be directly or indirectly identified from that data. In this case, it means personal data that you give to Us via Our Site. This definition shall, where applicable, incorporate the definitions provided in the EU Regulation 2016/679 – the General Data Protection Regulation (“GDPR”); and|
|“We/Us/Our”||Means Property118 Ltd , a limited company registered in England under company number 10295964, whose registered address is 1st Floor, Woburn House, 84 St Benedicts Street, Norwich, NR2 4AB.|
|Name of Cookie||Purpose||Strictly Necessary|
|JSESSIONID||Used only to collect performance data, with any identifiable data obfuscated||No|
|__cfduid||This cookie is strictly necessary for Cloudflare's security features and cannot be turned off.||Yes|
|Name of Cookie||First / Third Party||Provider||Purpose|
|__utma, __utmb, __utmc, __utmt, __utmz||First||Helps to understand how their visitors engage with our website|
|_fbp||First||Helps to understand how their visitors engage with our website|