Osborne to allow curbs on size of mortgages to prevent another housing bubble

February 7th, 2012

FAKE NEWS for the Zionist agenda

By
Tim Shipman

Last updated at 12:15 AM on 7th February 2012

George Osborne said the Bank of England will have powers to vary what mortgages customers can buy

Tough new rules to ban unsustainable mortgages and prevent another housing bubble are to be handed to the Bank of England, the Chancellor signalled last night.

George Osborne told MPs the Bank was set to win powers to vary what mortgages customers can buy to prevent overheating in the housing market.

A new Financial Policy Committee at the Bank would be able to set loan-to-value ratios on mortgages to burst credit bubbles before they become too big.

This could mean that when house prices are soaring, buyers could be forced to put down large deposits – for example, around 25 per cent of a home’s value – before being approved for a mortgage by banks or building societies.

But the Bank would also be able to intervene when the economy is in the doldrums, encouraging more attractive mortgage packages that would require deposits of only 5 or 10 per cent.

The Chancellor told MPs the new committee would be led by the Governor of the Bank of England. ‘Its job is not just to try to moderate a credit boom but to try to alleviate a credit bust,’ he said.

The plans would prevent banks and building societies repeating the mistakes made before the 2008 credit crunch, when many were offering customers mortgages worth up to 125 per cent of their property’s value.

Mr Osborne revealed the proposals as MPs discussed the second reading of the Financial Services Bill.

The FPC, which has already been set up but will only get legal force next January, will report back on the powers it should have in March.

But Mr Osborne made clear that he would back the Bank gaining regulatory control of mortgages.

He said: ‘In many senses this is the bread and butter of people’s daily lives and it is very important that we understand that as we create these instruments of policy that don’t currently exist.’

He said the previous light-touch regulation had led to ‘unmitigated disaster’ for the economy and the committee would be ‘entrusted with the stability for the whole financial system’.

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So lets say 3.5 times your salary as it used to be?? Great. An average 3 bedroom house in the UK should come down to about 90K… UK house prices have a long long way to fall.
Ohh, and while your about it how about limiting the number of properties people can buy to maybe two? A house should be a home, not a money making scheme for landlords to make a fast buck and be subsidized by the government.
But as usual… this is all government soundbite…. nothing will happen.

– James G, U*S*S*E*U, 07/2/2012 05:26

This scheme will never work.
It will not kick start the market any more than the lenders are trying themselves anyway and will prevent confidence where investors will beafraid to buy to sell on knowing that they may suddenly find themselves without buyers

– marks, leeds, 07/2/2012 01:45

So is he admitting that house prices are far too high? He did in a speech he made last Autumn. So if they are too high, how about bringing them down?
Getting interest rates back to ‘normal’ would help. And doing away with Shapps’ scams that just benefit the builders. Oh, and scrapping stupid mortgages like endowment (didn’t work), 100% and interest only.
With the present ultra low interest rates, we will have credit crunch 2 when rates go back up. have we learnt nothing?

– Nick, Sumware, 07/2/2012 00:51

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