FPC & Carney - Do....well, nothing

wotsthat

Graham_Devon wrote: »

No point having a go at me chaps. Just put the radio on and listen to the economists. Even they are exasperated.

Is it 5 Live you're listening to? Surprised they've got time to cover this minor news what with having spent the last 24 hours covering nothing more than Suarez's penchant for biting people..

All day yesterday...

Liverpool supporter - he's a nice guy, he needs help, he does a lot of good work for charity

Everton supporter - yeah just like Jimmy Saville

Are the economists any less partisan?

CLAPTON

so, the BoE don't think there is a bubble and so are doing nothing in particular except making a few rules and guidelines that may or may not have an affect in the future

maybe they think there is a shortage of houses?

Graham_Devon

Slightly interesting. Remortgages will be excluded from the cap. Presumably they want to avoid the potential issues of people being stuck on mortgages unable to move to another product.

Surely though the BOE should apply a rule fairly to all?

Risk is risk...and if he's not getting involved in the housing market, surely the risk is the same from a new buyer or an existing mortgagee looking to move products?

wotsthat

Graham_Devon wrote: »

Slightly interesting. Remortgages will be excluded from the cap. Presumably they want to avoid the potential issues of people being stuck on mortgages unable to move to another product.

Surely though the BOE should apply a rule fairly to all?

Risk is risk...and if he's not getting involved in the housing market, surely the risk is the same from a new buyer or an existing mortgagee looking to move products?

Someone able to remortgage to a fixed rate is going to be a lower risk than the same person stuck on a variable rate when rates increase.

Maybe just the BoE taking a pragmatic view of how to deal with lending made using different criteria?

michaels

Seems to be a lot of disappointment. Reading the banks PDF they seemed.to.have looked at what the risks are to financial stability - note not to individual borrowers- and concluded based on historical evidence that loan to income multiples whilst not currently a problem could become one if London house prices continue to boom and thus are bringing in a preemptive cap to prevent this. HTB has simultaneously been amended to prevent any loans being at more than 4.5 times income thus protecting the tax payer more thoroughly than the banks.

Conclusion- yes prices and multiples are high but even with an increase in nterest rates larger than the market.is expecting they are not unaffordable.

Lots.that.can be disagreed with in the analysis but best debated within the framework of which assumptions are wrong than with an 'its not fair' attitude?

Thrugelmir

Graham_Devon wrote: »

Well, like the majority, I was at least expecting something on HTB.

HTB is having a negible impact on the wider market.

The BOE has drawn a line in the sand. That may well force some lenders to readjust their lending books to comply. So this regulation will have an indirect impact.

From this level the BOE can now progressively down tighten down further.

Stress testing borrowers at a rate of 3% higher clearly shows the concerns of the BOE.

The BOE's policy seems more coherent that it initially appeared. As there's a lot of prepartory lever pulling going on. That over time will have an impact.

Thrugelmir

Graham_Devon wrote: »

Slightly interesting. Remortgages will be excluded from the cap. Presumably they want to avoid the potential issues of people being stuck on mortgages unable to move to another product.

Remortgaging is subject to the new MMR. So is having an impact already.

If people are "stuck" then it's most likely down to their own personal financial mismanagement. Rather than lenders not willing to offer mortgages.

wymondham

Thrugelmir wrote: »

Remortgaging is subject to the new MMR. So is having an impact already.

If people are "stuck" then it's most likely down to their own personal financial mismanagement. Rather than lenders not willing to offer mortgages.

Could people be affected by MMR by having bought their house with high multiples given by the lender previously, who are now not willing to do the same? When re-mortgaging I presume if people don't 'pass' then the worst is going to SVR? Would a lender refuse to lend??

CLAPTON

wymondham wrote: »

Could people be affected by MMR by having bought their house with high multiples given by the lender previously, who are now not willing to do the same? When re-mortgaging I presume if people don't 'pass' then the worst is going to SVR? Would a lender refuse to lend??

any fixed rate or similar mortgage will have a default 'new' deal when the fix ends
so they can't refuse to continue with the mortgage although you may not be able to get a new fix.

Thrugelmir

wymondham wrote: »

Could people be affected by MMR by having bought their house with high multiples given by the lender previously, who are now not willing to do the same? When re-mortgaging I presume if people don't 'pass' then the worst is going to SVR? Would a lender refuse to lend??

Some lenders are already being selective in what they offer existing customers when it comes to new products. Lenders are within their rights to perform a credit check as part of the process and use this in making any decision.