View more on these topics

Carney calls for public debate on LTV caps

Bank of England governor Mark Carney says there needs to be an open debate about introducing loan-to-value caps to curb risky mortgage lending. 

Speaking at a Treasury select committee hearing on the Bank’s inflation report today, Carney rejected suggestions the housing market was booming by pointing out it was performing very differently across the country.

Carney re-iterated the ways in which the Bank could intevene to restrict risky lending and stop excessive LTV deals.

Carney told MPs: “In simple terms, it begins with more intensive supervision of mortgage lending, making sure underwriting standards are maintained, so that we do not see a return to more than 100 per cent loan-to-value ratios, that there are appropriate standards on loan to income.

“It can extend all the way to sectoral capital requirements, additional capital, that banks would have to hold against certain types of lending, including mortgages.

“I also think it should be a question of open debate for whether there should be a consideration, if there were a case where there were vulnerabilities in the judgment of the financial policy committee, whether there should be some guidance provided in terms of LTV ratios and loan-to-income ratios. We do not have powers of direction in that regard, but certainly we retain the ability to observe and recommend if necessary.”

Chancellor George Osborne wants the financial policy committee to have the power to cap LTVs but the FPC has rejected it last year on the basis it should be a decision for Parliament. 

It has been under discussion by European regulators, the International Monetary Fund along with politicians and economists since the crisis struck in 2007.

Earlier this week business secretary Vince Cable has questioned whether the second part of the Help to Buy scheme should go ahead over bubble fears.



George Osborne concern over lack of 95% LTV mortgages

Chancellor George Osborne says the lack of 95 per cent loan to value mortgages is a “social problem” as he launched a fierce defence of the Help to Buy scheme and high loan-to-value deals. Speaking in London today, Osborne said the housing market was not working effectively, given house prices are down by a quarter […]


3mc has received more enquiries by September than all of 2012

Mortgage club and packager 3mc says it has already received £1bn of mortgage enquiries during 2013, compared to £989m during the whole of 2012. 3mc director Doug Hall attributes the increase in enquiries to the improving housing market. He says: “2013 has been an excellent year for 3mc. Not only has our new business pipeline […]

Claims data tool aims to reassure

Research firm The Finance & Technology Research Centre has launched a new claim statistics tool which aims to allow advisers to dispel consumers’ fears that protection insurers do not pay claims, therefore improving the chance of a sale. The online tool, which is free, features in-depth claims data for life cover, critical illness cover and […]


Time to set the record straight on short-term lending How bored are you of hearing about bridging in relation to two things only? Apparently it is “full of shady practice” and people are forever asking “shouldn’t it be regulated?” My colleagues and I have been in the short-term lending sector for 25 years and I […]


News and expert analysis straight to your inbox

Sign up