We've seen a lot of
There had been fevered anticipation beforehand on what Carney and his fellow members on the financial policy committee (FPC) might announce when presenting the Bank's half-yearly assessment of risks to the financial system. Specifically, would they take sweeping action to curb house prices, which are rising at almost 10% a year in the
But there were no draconian measures to limit mortgages. Instead, Carney said, the FPC favoured a "graduated and proportionate" response. Under the measures announced, mortgage loans at or above four and a half times a borrower's income will be limited to 15% of banks' and building societies' mortgage books. As no lender is currently at that ceiling, it means there will be no immediate impact. What it does not mean is that the move amounts to nothing. By the Bank's own calculations, the measures will start to bite if house prices rise more than 20% over the next three years.
Carney's first year, page 40
House price inflation is at almost 10%.
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