House buyers could be refused mortgages under new Bank of England powers to be unveiled by the Chancellor of the Exchequer. With the economy struggling since the collapse of Banks such as the Northern Rock and a lack of stability in recent months, it appears this is a necessary adjustment.
Mortgage control for Bank of England
George Osborne will announce that he will hand a host of new controls to the Bank of England to prevent another financial crisis. The changes may mean the Bank could impose restrictions on the amount banks can lend and thereby refuse mortgages for home buyers.
The Bank of England would be empowered to prevent banks from lending too much if they feel that this would destabilise the economy. It’s expected to include restrictions on the loan-to-value ratios and will try to control such housing booms as we have seen in the past.
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