Dale's comments came after the bank was accused by critics of 'pulling its punches' with its latest policies to stem excessive lending. The Bank itself admitted that the new measures would have only a 'minimal' effect on the market.
Last week, the Bank's
The rules require that high loan-to-value mortgages – where the homebuyer is borrowing 4.5 or more times their income – should account for no more than 15 per cent of a bank's total mortgage lending.
They also require banks to ensure that all new borrowers would be able to cope with a 3 per cent rise in interest rates over the subsequent five years.
The new rules for lending represent a dramatic shift for
Despite fears of a bubble in some parts of the housing market, the Bank said it expected prices to rise by a further 20 per cent
by 2017. Dale said the aim of the policy was not to stop prices rising, but to prevent households from becoming too indebted.
'Your readers have house insurance,' he said. 'They should think of the measures we have taken as insurance for the country's housing market.
'When people come to judge the success of this policy in, say, two years' time, do not judge us on what has happened to house prices, judge on whether we have controlled the levels of household indebtedness.'
He said the new mortgage rules would allow the MPC to set interest rates to suit the pace of the economic recovery and 'not be distracted' by the housing market.
Dale, a former member of the Bank's
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