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Debate House Prices


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Bank of England Asks Government for New Powers Over Housing

officeuk
officeuk Posts: 51 Forumite
in Debate House Prices & the Economy
Prices of houses rising. Mortgages increasing. Economy back on track. House prices can only ever go up.

This time its different from the 2007 crash. BOE are more vigilant this time.

If everything is going well, why does the BOE need this?
«13

Comments

  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Because at the moment they have to ask lenders to comply. What they are asking for is powers to force lenders to comply.

    Reading between the lines, it appears there may be an issue with banks doing what the BOE are asking.
  • officeuk
    officeuk Posts: 51 Forumite
    Yeah due to less profit!
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    officeuk wrote: »
    Prices of houses rising. Mortgages increasing. Economy back on track. House prices can only ever go up.

    This time its different from the 2007 crash. BOE are more vigilant this time.

    If everything is going well, why does the BOE need this?

    Isn't this the BoE being vigilant?
  • officeuk
    officeuk Posts: 51 Forumite
    Oh yes they are really very vigilant. Since 2007 (maybe before) in fact. House prices are very affordable due to the 6, 7, 8+ x salary multipliers. Yes very very vigilant.
  • ukcarper
    ukcarper Posts: 17,337 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    officeuk wrote: »
    Oh yes they are really very vigilant. Since 2007 (maybe before) in fact. House prices are very affordable due to the 6, 7, 8+ x salary multipliers. Yes very very vigilant.

    How many people get 6x salary mortgages let alone 7 or 8x.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    officeuk wrote: »
    Oh yes they are really very vigilant. Since 2007 (maybe before) in fact. House prices are very affordable due to the 6, 7, 8+ x salary multipliers. Yes very very vigilant.

    The BoE's job isn't to buy you a house.
  • Bantex_2
    Bantex_2 Posts: 3,317 Forumite
    Is part of it's job to control over indebtedness?
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    Bantex wrote: »
    Is part of it's job to control over indebtedness?

    Indirectly: one of its jobs is to maintain the stability of the banking system.
  • ManAtHome
    ManAtHome Posts: 8,512 Forumite
    Part of the Furniture Combo Breaker
    Generali wrote: »
    Indirectly: one of its jobs is to maintain the stability of the banking system.
    Presumably in a "after the event" kinda way?
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    ManAtHome wrote: »
    Presumably in a "after the event" kinda way?

    Not at all.

    Banking stability was part of Labour's disastrous FSA regime during the GFC. The BoE managed bank stability for decades with very few problems and certainly no systemic issues.

    Mortgage lending isn't high, consumer lending is low. Where's the risk to the banking system at the moment? House prices are high but that just means banks will need to ensure lower LTVs. I suspect that is part of the new powers they seek.
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