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| Version 0 | Version 1 |
|---|---|
| Decision expected on housing market action | Decision expected on housing market action |
| (about 4 hours later) | |
| Central bankers will explain later whether they plan to take action to cool the housing market in parts of the UK. | |
| The Bank of England's Financial Policy Committee (FPC) has new powers to tackle any threat to the stability of the UK economy. | The Bank of England's Financial Policy Committee (FPC) has new powers to tackle any threat to the stability of the UK economy. |
| Mark Carney, the Bank's governor, has said that the housing market is the biggest risk to long-term recovery. | Mark Carney, the Bank's governor, has said that the housing market is the biggest risk to long-term recovery. |
| The FPC will outline whether it plans to take action, and what that might be. | The FPC will outline whether it plans to take action, and what that might be. |
| Geographical differences | Geographical differences |
| The latest official figures about the housing market showed an annual property price increase of 18.7% in London. | The latest official figures about the housing market showed an annual property price increase of 18.7% in London. |
| Excluding London and the South East of England, the cost of a home was 6.3% higher in April than 12 months before, the Office for National Statistics (ONS) said last week. | Excluding London and the South East of England, the cost of a home was 6.3% higher in April than 12 months before, the Office for National Statistics (ONS) said last week. |
| But various surveys have suggested that the heat might be coming out of the market with mortgage approvals - a sign of future sales - having slowed in recent months. Some areas outside of London and the South East have seen relatively little rise in activity among buyers and sellers. | But various surveys have suggested that the heat might be coming out of the market with mortgage approvals - a sign of future sales - having slowed in recent months. Some areas outside of London and the South East have seen relatively little rise in activity among buyers and sellers. |
| Some banks - notably Lloyds Banking Group and RBS - have introduced tighter restrictions in order to tackle "inflationary pressures in the London housing market". | Some banks - notably Lloyds Banking Group and RBS - have introduced tighter restrictions in order to tackle "inflationary pressures in the London housing market". |
| The FPC met last week, with the housing market expected to have been on the agenda but the outcome will not be made public until 10.30BST on Thursday. | The FPC met last week, with the housing market expected to have been on the agenda but the outcome will not be made public until 10.30BST on Thursday. |
| Possibilities | Possibilities |
| The committee has powers that could be used to calm the housing market, and primarily affect the ability of potential buyers to get a home loan. | The committee has powers that could be used to calm the housing market, and primarily affect the ability of potential buyers to get a home loan. |
| Should it decide to use them it could advise, but at present not impose, a cap on home loans related to income or the value of the house. | Should it decide to use them it could advise, but at present not impose, a cap on home loans related to income or the value of the house. |
| It could demand that banks hold more capital against their mortgage lending, effectively rationing the amount that is lent. | It could demand that banks hold more capital against their mortgage lending, effectively rationing the amount that is lent. |
| Lenders are already using new affordability checks - known as the Mortgage Market Review - which test people's ability to repay were interest rates to rise. The committee could recommend that these checks are even stricter. | Lenders are already using new affordability checks - known as the Mortgage Market Review - which test people's ability to repay were interest rates to rise. The committee could recommend that these checks are even stricter. |
| Finally, the government's Help to Buy programme, aimed at helping people with an ability to make repayments but with relatively little in savings for a deposit, could be scaled back on the committee's recommendation. | Finally, the government's Help to Buy programme, aimed at helping people with an ability to make repayments but with relatively little in savings for a deposit, could be scaled back on the committee's recommendation. |
| Some concerns have been raised that these powers should be in the hands of elected politicians, rather than the Bank. | Some concerns have been raised that these powers should be in the hands of elected politicians, rather than the Bank. |