The Bank of England has been granted new powers in the housing market this week.
A statement issued by the government has revealed the organisation's Financial Policy Committee (FPC) will now have the ability to set limits on debt-to-income ratios and loan-to-value ratios for mortgages in a bid to ensure stability in the housing sector.
Such powers are already commonplace in a number of countries across the world, with the likes of Canada, New Zealand and Norway all having loan-to-value limits in place.
Commenting on the development, chancellor George Osborne said: "Curbing Britain’s age-old vulnerability to banking and housing booms is one of the goals I recently set for the next two decades of Britain’s economic policy, and today’s announcement of new powers for the Bank of England - which we’ve put back at the heart of safeguarding financial stability - shows our determination to achieve this."
He added the measure is just one part of the government's plans to ensure economic stability and help to drive the UK forwards.
The new powers were recommended by the FPC prior to their implementation and the organisation has also called for greater ability to control the private rented sector. Politicians are set to debate whether these capabilities should be granted in the new parliament.
With the general election now just a few months away, we can expect to see the major parties' proposed approaches to housing come under close scrutiny as voters decide who they will support.
However, the housing market itself may be relatively unaffected by the uncertainty. A recent report from CBRE claimed elections have historically had a limited impact on the sector's performance and the general economy is a more important driver of movement.
A statement issued by the government has revealed the organisation's Financial Policy Committee (FPC) will now have the ability to set limits on debt-to-income ratios and loan-to-value ratios for mortgages in a bid to ensure stability in the housing sector.
Such powers are already commonplace in a number of countries across the world, with the likes of Canada, New Zealand and Norway all having loan-to-value limits in place.
Commenting on the development, chancellor George Osborne said: "Curbing Britain’s age-old vulnerability to banking and housing booms is one of the goals I recently set for the next two decades of Britain’s economic policy, and today’s announcement of new powers for the Bank of England - which we’ve put back at the heart of safeguarding financial stability - shows our determination to achieve this."
He added the measure is just one part of the government's plans to ensure economic stability and help to drive the UK forwards.
The new powers were recommended by the FPC prior to their implementation and the organisation has also called for greater ability to control the private rented sector. Politicians are set to debate whether these capabilities should be granted in the new parliament.
With the general election now just a few months away, we can expect to see the major parties' proposed approaches to housing come under close scrutiny as voters decide who they will support.
However, the housing market itself may be relatively unaffected by the uncertainty. A recent report from CBRE claimed elections have historically had a limited impact on the sector's performance and the general economy is a more important driver of movement.