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26/06/2014
Bank Of England To Impose Mortgage Caps
The Bank of England (BoE) is to impose new limits on mortgages from October, limiting the loan-to-income (LTI) ratio for most applicants seeking new bonds or re-mortgages, amid fears of instability in the housing market.
The plan was outlined by the Bank with governor Mark Carney saying the housing market could be a threat to the UK economy's stability.
Mr Carney, following the publication of the Financial Stability Report, said the "gains in house prices were at the limit of our tolerance on rising debt" and the economy was still vulnerable and the housing instability is the biggest risk to the UK.
The base rate is to rise from its current five-year historic low of 0.5% to 3%, the "interest rate stress test" would be applied to borrowers to calculate if they can keep up their mortgage repayments.
However, despite the governor recently hinting at a possible rate rise, analysts now expect the rate to stay on hold until the economy recovers.
Mr Carney's announcement came up as new data showed that more than 35,000 households have been helped by the Government's Help to Buy deposit schemes.
(CVS)
The plan was outlined by the Bank with governor Mark Carney saying the housing market could be a threat to the UK economy's stability.
Mr Carney, following the publication of the Financial Stability Report, said the "gains in house prices were at the limit of our tolerance on rising debt" and the economy was still vulnerable and the housing instability is the biggest risk to the UK.
The base rate is to rise from its current five-year historic low of 0.5% to 3%, the "interest rate stress test" would be applied to borrowers to calculate if they can keep up their mortgage repayments.
However, despite the governor recently hinting at a possible rate rise, analysts now expect the rate to stay on hold until the economy recovers.
Mr Carney's announcement came up as new data showed that more than 35,000 households have been helped by the Government's Help to Buy deposit schemes.
(CVS)
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Northern Ireland WeatherToday:A showery start with outbreaks most frequent north of Lough Neagh and through the morning, before dwindling during the afternoon as the northwest breezes ease and brighter spells of weak sunshine prosper. Maximum temperature 8 °C.Tonight:A dry night, save for a few light showers around the coasts, with prolonged clear spells and light winds bringing a frosty dawn for many in central and southern parts. Minimum temperature -3 °C.
