Home Residential Property Cool it, Carney: Osborne gives Bank new powers to take heat out of housing market

Cool it, Carney: Osborne gives Bank new powers to take heat out of housing market

by Deleted Subscriber Content
13th Jun 14 10:16 am

Sure, it’s set to be the most scorching day of the year today.

But the warmth outside is positively chilly compared to the heat in the UK housing market.

So George Osborne has finally granted the Bank of England powers to do something to try to cool it down.

Last night, in the annual Mansion House bash that sees addresses from the Chancellor and the Governor of the Bank of England, Osborne announced that the Bank will be given new powers by the end of this Parliament, including the right to restrict the size of mortgage loans.

At the same event, Carney gave his biggest hint yet that interest rates could go up this year.

Osborne said: “Does the housing market pose an immediate threat to financial stability today? No, it doesn’t. Could it in the future? Yes, it could, especially if we don’t learn the lessons of the past.”

He added: “I want to make sure that the Bank of England has all the weapons it needs to guard against risks in the housing market.

“I want to protect those who own homes, protect those who aspire to own a home, and protect the millions who suffer when boom turns to bust.”

The Chancellor explained his concerns over home-buyers borrowing too much, threatening both individuals and the banks that lend to them.

And he sounded keen for the Bank to flex its new powers, when they come into force: “I say today, very clearly: the Bank of England should not hesitate to use these new powers if they think it necessary to protect financial stability.”

Osborne also announced that he plans to change restrictions on developing brownfield land, in the hope that an additional 200,000 new homes will get planning permission, in a bit to ease up the dire housing supply shortage we’re facing.

Now it’s over to Mark Carney to do what he can with his new powers to cool down the housing market.

 

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