Enable Independent, Independent Financial Advisors in Bishop’s Stortford were pleased to see that the Bank of England have expressed that they are ready to take aggressive action against UK lenders to protect the UK from a boom and bust economy.
The Financial Policy Committee, who were set up to safeguard the stability of the banking system, published a draft policy covering the powers it will have when it launches in April this year.
The Committee will have the authority to stop banks from issuing large mortgages or commercial property loans to increase their defenses in the good times to absorb losses in an economical downturn.
This type of regulation will be controversial as it increases the cost of mortgages and will make it difficult for would-be buyers to get the funds they need to get on the first run of the ladder.
However the Bank have stated that better regulation will lead to a decline in bad loans and will help prevent the sort of property booms and busts.
There are some indications of the housing market slowly improving. A survey carried out by e.surv, showed that 2012 was the best year for mortgage lending since 2007, and lending to first time buyers was up by 11 per cent.
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