27th June 2014
The Bank of England has taken fresh steps to prevent people from taking on unaffordable mortgages.
Under the proposals, lenders will not be allowed to lend any more than 15% of residential mortgages at more than 4.5 times a borrower’s income. In addition, the Bank’s Financial Policy Committee recommends that lenders check mortgage applicants can cope with a 3% rise in interest rates – slightly tougher than the current affordability checks. The new measures are designed to cool the housing market without derailing the economic recovery.
Source: Financial Times (27/06/2014)