Bank of England
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Latest property news
Buy-to-let mortgages to be overseen by BoE
Growth in the buy-to-let sector could soon come to a very abrupt end if the Chancellor George Osborne presses ahead with plans to regulate those mortgages available to landlords. The Chancellor announced late last week during a Treasury Committee hearing that he intended to give the Bank of England (BoE) additional powers to regulate the buy-to-let mortgage market. While the stock of owner-occupier mortgage lending has risen by just 2 per cent since 2008, buy-to-let mortgage lending has increased by more than 40 per cent over the same period. But growth could come to an end after the Bank, which already has the power to regulate the wider the residential mortgage market, was also given the authority to regulate the buy-to-let sector too, should it wish to do so. BoE warned last month that Britain’s buy-to-let market poses an increasing threat to financial stability because rising property prices expose vulnerabilities that could magnify a housing market crash. The Financial Policy Committee, led by Governor Mark Carney, said landlords were more sensitive to booms and busts, often buying property when prices increase but also selling homes swiftly during a downturn. Peter Williams (left), Executive Director of the Intermediary Mortgage Lenders Association…
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Housing Market
Homeowners urged to factor in interest rate rise
People thinking of buying a home or remortgaging their existing property should budget for a potential interest rate increase in the coming months after the Bank of England signified that it expects to see interest rates rise sooner rather than later. UK interest rates have remained at a record low of 0.5 per cent since March 2009, and although any hike to the rate would be dictated by economic data, including wage growth and productivity, over the next few months, the Governor of the Bank of England, Mark Carney (left), did last week admit that the time for an increase is ‘drawing closer’. It is not clear when the rate rise may occur, but Nicholas Leeming (right), Chairman of agents Jackson-Stops & Staff, is urging homeowners not to take any chances. He said, “Mark Carney has been careful to flag that interest rates will edge higher in the longer term as the economy continues to grow and inflationary pressure on wages increase. “Property buyers should recognise that rates will move towards more sustainable, long term levels and so budget for higher mortgage costs accordingly. Vendors should be aware that any such increases will create resistance to overly high guide prices.”…
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