In the press: Cable questions lending levels

 

It is fair to say Business Secretary, Vince Cable, caused a bit of a stir last month as he questioned current lending levels and suggested that parts of the UK housing market were getting "out of control." As the debate continues as to whether we are in, or approaching a housing bubble, it seems measures are being taken to ensure that previous mistakes are not repeated. Although the mortgage market review will undoubtedly hope to rectify some former errors, it seems the government may share some of Cables' concerns and are taking further steps.

 

Only a couple of days after Cable declared his appal at some banks' lending up to five times an applicant's income The Chancellor, George Osborne, declared that he will give the Bank of England 'all the weapons it needs to guard against risks in the housing market.' One weapon that The Chancellor has provided the Bank of England with is the ability to enforce lending caps. A strategy that Head of the Bank of England, Mark Carney, is already familiar with having deployed similar enforcements during his time as head of the central bank.

 

Whilst this may spark concern for those looking to purchase, don't despair. As The Council of Mortgage Lenders highlighted there is a big difference in being given power and actually employing it. This move may simply be a knee jerk reaction from the Chancellor in response to The International Monetary Fund's scrutiny of the UK housing market.