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Governor Bank of England warned that proposals that supported governments to reduce limitations for rushing mortgage loans could start more home refund and fails to help customers who did not announce for the first time, even when he announced plans to review politics.
Andrew Bailey told MPs on Wednesday that “very happy to have had a very open public discussion” on mortgage limits in the UK, but said it should be taken into account “better outcomes”, the rules were ensured in avoiding an increase in the loan of the loan in the house default during recent shocks.
“They helped to avoid making a big tail mortgage, which, when we have an inevitable cyclical fall or shock that hit the economy, it turns out that the real problem we saw in the past,” Bailey said. “So, I think it was useful.”
His comments indicate that Boe is reluctant to further relax restrictions on the mortgage loans of British banks after doing so in November. Boe’s sister regulator authority for financial behavior proposed go further earlier this month.
UK Chancellor Rachel Reeves supported FCA’s proposal, narrates Last week, the Financial Times was “absolutely open to watching ideas that can increase ownership of homes and help workers’ families enter the ladder of apartments.”
Reeves and Prime Minister Sir Keir Starmer invited all regulators in the UK, including Boe and FCA, to do more to support her goal of reviving the stagnant economy of the country by mitigating the burden of business rules.
Bailey told the Treasury SELECT selection committee to support Starmer’s incentive to increase growth, but said that “no compromise” between this and the main goal of BOE to preserve financial stability.
The UK mortgage loans control the mixture of the Central Bank and FCA Financial Policy Committee’s Rules, most of which were introduced after the financial crisis in 2008. When the state expelled several banks.
FPC limits banks above a certain size to borrow no more than 15 percent of mortgage more than 4.5 times more than household revenue. He changed the threshold of borrowing this restriction in November, so he was applied to fewer banks.
FCA requires banks to perform accessibility tests on the applicants for mortgage to ensure that they can afford monthly repayments if interest rates have grown in the future. Boe played a similar accessibility test in 2022 because he folded with FCA rules.
FCA said that a letter to Starmer this month-like a Government’s invitation that seeks regulators for growths for growth-will “start to simplify responsible loan and rules of mortgage counseling, supporting ownership of home default values ”.
Bailey said that the potential benefits of mitigating these restrictions will continue to be balanced from the gains from that. He also warned that he could do little to help customers who often represent the difficulties in providing the required deposit for the first time to buy a home.
“In all the research conducted, when you ask what is the main obstacle to entering the mortgage market, it provides a deposit,” Bailey said.
Nathanël Benjamin, Executive Director of the BOE for Financial Stability and Risk Strategy, told MPs that there is still “a lot of head space” before the banks brought the limit of mortgage loans “so this is not an obstacle,” adding that the share is the first The first time the customers in the new mortgage loan have been at the highest level of 20 years.
He also warned that the mitigation of limitations without increasing supplying new homes is likely to encourage home prices, which “make households make it difficult for things to enter the living space.”
