Further to Adam’s post yesterday , and before many/some of you rush to assume that the only tool in the box is interest rate rises, I have highlighted before that the BOE’s FPC (Financial Policy Committee) has the mandate to introduce tougher measures to curb excessive/irresponsible lending
In the interview Carney says they could check lending procedures
What we can influence … is whether the banks are strong enough. Do they have enough capital against risk in the housing market?
So people can get mortgages if they can afford them but they won’t if they can’t.By reinforcing both of those we can reduce the risk that comes from a housing market that has deep, deep structural problems.
Carney voices fresh concerns over UK housing market
Mr Carney said there was evidence that large mortgages, where lenders approve loans of more than four times people’s salaries, are on the rise again.
We don’t want to build up another big debt overhang that is going to hurt individuals and is very much going to slow the economy in the medium term.
We’d be concerned if there was a rapid increase in high loan-to-value mortgages across the banks. We’ve seen that creeping up and it’s something we’re watching closely.
He also addresses the issue that the UK simply does not build enough houses, a point that PM Cameron also conceded to in a separate Sky interview.
