Mark Carney steps in to cool house prices
Bank of England governor Mark Carney announces caps on high-risk mortgage lending

A free daily digest of the biggest news stories of the day - and the best features from our website
Thank you for signing up to TheWeek. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.
Mark Carney has stepped in to cap mortgages and restrain the housing market amid concerns that house price rises could derail Britain's economic recovery.
The Governor of the Bank of England introduced a raft of new measures to limit riskier mortgages and "prevent a build-up of consumer debt", Bloomberg reports.
Under the new rules, loans of 4.5 times the borrower's income or more will be limited to no more than 15 per cent of a bank's mortgage book. Currently 11 per cent of loans exceed that earnings multiple, more than at any time in history, The Times says.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Carney told reporters that the mortgage caps would help cement the country's economic recovery. "With recovery in the UK gaining momentum, the Bank of England is now focused on turning that recovery in to a durable expansion," he said.
Britain has a long legacy of indebtedness that "if left unchecked could undermine that durability", he said. "The biggest risks relate to the housing market."
But Carney insisted that the new measures would not harm individuals' chances of getting on to the housing ladder."These actions will have a minimal impact in the future if – and it's an important if – if the housing market evolves in line with the Bank's central view," Carney said.
"The 15 per cent cap... could quickly become relevant if house prices grow more than we expect, if incomes grow less rapidly than we expect, or if underwriting standards slip."
The BBC's economics editor Robert Peston said that such "modest constraints" will have little effect. "It is highly unlikely that these will have any significant impact on the health of the housing market in any part of the UK, including the booming markets in London and the South East," Peston said.
Rather, Peston concluded, the changes seem to be " an insurance policy" to prevent banks from becoming "much more reckless" in the years ahead.
Continue reading for free
We hope you're enjoying The Week's refreshingly open-minded journalism.
Subscribed to The Week? Register your account with the same email as your subscription.
Sign up to our 10 Things You Need to Know Today newsletter
A free daily digest of the biggest news stories of the day - and the best features from our website
-
Why is the government on the brink of a shutdown?
Today's Big Question GOP infighting is bringing the country to a standstill, but even Republicans aren't entirely sure why
By Rafi Schwartz Published
-
Today’s political cartoons — September 29, 2023
Friday's cartoons - Biden's dog bite incident, the government shutdown and more
By The Week Staff Published
-
'A teetering democracy of gerontocrats?'
Instant opinion Opinion, comment and editorials of the day
By Harold Maass Published
-
Interest rates: more ‘trauma’ for households
Talking Point Latest hike will cause ‘plenty of pain for borrowers’
By The Week Staff Published
-
Interest rates rise to 5.25% for first time in 15 years
Speed Read Inflation is slowing but at 7.9% it remains well above the Bank of England’s 2% target
By Julia O'Driscoll Published
-
Five options to get the UK back to 2% inflation
feature Some economists believe alternatives to raising interest rates are in the country’s best interests
By Sorcha Bradley Published
-
Why aren’t soaring interest rates bringing down inflation?
Today's Big Question PM pins blame for stubborn inflation on fixed-rate mortgages, but economists say the picture is more nuanced
By Arion McNicoll Published
-
Inflation crisis: is a recession the only answer?
Talking Point Experts suggest sharp slowdown may be necessary to avoid economic spiral
By The Week Staff Published
-
Who will get the blame for UK mortgage misery?
Today's Big Question As mortgage rates continue to soar, fingers have been pointed far and wide
By Arion McNicoll Published
-
UK house prices fall at fastest rate for nearly 14 years
Speed Read First-time buyers may welcome the news but higher than expected inflation means mortgage costs remain an issue
By Jamie Timson Published
-
Sticky inflation and sluggish growth: why does UK economy continue to struggle?
Today's Big Question Food prices, Brexit and the Bank of England have been blamed for poor economic performance
By Chas Newkey-Burden Published