Plans to place loan-to-income restrictions on mortgage lenders have been announced by the Bank of England's Financial Policy Committee (FPC).
Following its June meeting the FPC has recommended loans worth more than 4.5 times income should occupy less than 15% of a firm's new mortgage lending. This has been recommended to the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) and a consultation period will take place between now and August 31. New rules will come into effect on October 1. The FPC said the new rules would prevent ‘excessive household indebtedness' and lenders should continue to apply whatever criteria they feel are appropriate to their risk appetite when taking individual lending ...
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