Bank to take role polic­ing LTV lev­els

Yorkshire Post - Property - - PROPERTY -

THE gov­ern­ment is set to hand new pow­ers to the Bank of Eng­land to reg­u­late the mort­gage mar­ket by al­low­ing it to set loanto-value ra­tio lim­its.

The aim is to con­trol boom and bust and pre­vent un­sus­tain­able mort­gages.

The Fi­nan­cial Pol­icy Com­mit­tee (FPC) at the Bank will be able to al­ter LTV lim­its – for ex­am­ple, set­ting them at 75 per cent if it feared a credit bub­ble, or at 95 per cent if it wanted to en­cour­age more lend­ing.

The new pow­ers could come into force in Jan­uary next year, ac­cord­ing to Mr Os­borne.

He said the reg­u­la­tions were not just to try to mod­er­ate the mar­ket and pre­vent the 125 per cent mort­gage lend­ing of­fered in the pre-2008 boom.

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