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Did I Hear Robert Peston Right - 75% LTV

doire_2
doire_2 Posts: 2,280 Forumite
Part of the Furniture 1,000 Posts Combo Breaker
when he said that as Osbourne has give the BOE the power to monitor banks it means the BOE can stop banks giving mortgages if house prices become too high?

Can someone confirm that? I was half asleep lastnight when the report was on

Comments

  • maninthestreet
    maninthestreet Posts: 16,127 Forumite
    Part of the Furniture
    doire wrote: »
    when he said that as Osbourne has give the BOE the power to monitor banks it means the BOE can stop banks giving mortgages if house prices become too high?

    Can someone confirm that? I was half asleep lastnight when the report was on


    In theory, yes, the BOE could restrict mortgages, but no details have been given yet as how this would work in practice.
    "You were only supposed to blow the bl**dy doors off!!"
  • mbga9pgf
    mbga9pgf Posts: 3,224 Forumite
    They are thinking of using LTV limits as a means of controlling excessive HPI. And not before time!
  • doire_2
    doire_2 Posts: 2,280 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    edited 17 June 2010 at 9:46AM
    mbga9pgf wrote: »
    They are thinking of using LTV limits as a means of controlling excessive HPI. And not before time!


    Just read it could be 75%. :T

    Oh dear. Some estate agents are worried. My heart bleeds


    http://uk.finance.yahoo.com/news/mortgage-caps-40pc-could-be-denied-a-loan-tele-5113bf50d943.html?x=0
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    it will never happen - 85%/90% would be the max i would have thought that they'd restrict it to.

    and that's if the housing market overheats - which it won't for a while yet...
  • sarkin1
    sarkin1 Posts: 283 Forumite
    Part of the Furniture Combo Breaker
    Have to agree with Chucky here 75% is never going to happen but 90% I think would be better.
    :cool:
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Chaos_A.D. wrote: »
    Aye 75% I would imagine is a pipe dream, as I've said in another thread, pity. 75% LTV could have perhaps been implemented in 2000-2001, but the resulting crash now would be too much for the economy to bare, especially if the 40% CGT comes into force.

    The legislation if were to be introduced would not be retrospective.

    It would merely be a mechanism to stop a new bubble occuring in the future.

    Existing mortgage holders would be uneffected.

    The mortgage market has a long way to go before normalising yet, so this piece of legislation most likely won't be required anyway.
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