Bank to take role policing LTV levels
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.