Bank of England Set Limits to curb Irresponsible Lending

Fri, 27 Jun 2014

Bank of England Set Limits to curb Irresponsible Lending
The Bank of England has announced new restrictions that it will apply to the mortgage market come October, in an attempt to prevent irresponsible lending.

Addressing the issue of inflating house prices and experts' fears of the formation of a housing bubble, the Bank of England will restrict mortgage lending only to borrowers who will be able to cope if there was to be an increase in inflation of 3%.

Furthermore, mortgages will be restricted in terms of a Loan-to-Income (LTI) ratio.

There will be a 15 percent limit on the amount of mortgages that can be lent out with a LTI of more than 4.5. Currently, 19 percent of mortgages in London and an estimated 9 percent of mortgages nationwide exceed the 4.5. limit.

Chancellor George Osborne is backing these limits and says he is fully supporting them. He also vowed that no Help to Buy mortgages would be issued above a 4.5 LTI once the limits come into force in October. Fewer than 5 per cent of Help to buy Mortgages are thought to be over the 4.5 limit at the moment.

Overall however, it is thought that these limitations should not inhibit the majority of people seeking mortgages, simply alter their mortgages to stabilise the housing market.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.

Note: For a free no obligation chat with an independant mortgage specialist about your requirements please complete ourmortgage enquiry form below.

Mortgage, Remortgage or Buy-to-Let Mortgage Enquiry Form

Stop Press: Find the perfect mortgage!
Lending criteria has been relaxed and our specialists can find you great mortgage offers to compare.
Our team do all the work to find you the best offer
We'll help you find the best mortgage for your needs and ensure that everything runs as smoothly as possible.
Deposits required are again falling
The cost of the best deals has dropped recently for those borrowing either 80%, 85% or 90% of their property's value
Independent, searching the whole market
With 1000's of mortgage products available our mortgage brokers will source the mortgage that suits your situation.
Please complete this quick, free enquiry form.


Your Details

Home Buyer Guides

Home Buyer News

Speak with an independant mortgage specialist

About Company is part of the SFN Network of websites. Sitefinders Net Ltd is a U.K based company setup in 1995. Our core business is the development of online businesses using the generic domain name concept. We have a growing portfolio of websites in many different industries such as electronics, finance, retail, seasonal and health.

Privacy Policy

Get in Touch