New Home Owners And Snagging Forum
Investments => Financial Markets and the economy => Topic started by: The Prophet on November 28, 2013, 12:42:07 pm
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The Bank of England governor Mark Carney, has announced the Bank will be refocusing on lending to businesses, rather than residential mortgages from January 2014.
The news sent house builder's shares on free-fall, with Barratt down 9.6%, Taylor Wimpey down 6.3%, Persimmon down 6% with Bovis and Bellway both falling 5.8%.
Whilst presenting the Bank's Financial Stability Report, the BoE governor Mark Carney, said that the "Funding for Lending Scheme, will no longer be aimed at householders. An overheated housing market would be a risk to the economy," adding supporting mortgage lending was "no longer necessary".
"The changes announced today refocus the Funding for Lending scheme where it is most needed - to underpin the supply of credit to small businesses over the next year - without providing further broad support to household lending that is no longer needed."
Mr Carney said he saw a higher risk to financial stability from further rapid rises in house prices and that there were signs of house price growth picking up beyond London.
There have also been growing concerns over a house price bubble, with a committee of MPs asking the Bank of England to clarify its role in policing the Help to Buy scheme.
The Treasury Committee said the "scope and limits" of the Bank's role were not clear.
The Funding for Lending scheme has been widely responsible for plunging interest rates for savers, with the best rate ISA's currently available paying a paltry 1.8%.