A statement just issued by the FPC following a policy meeting on 19 March revealed that homeowners who borrowed more than four times their income accounted for the biggest share of new mortgages in the third quarter of 2013 than at any time since records began in 2005.
The FPC said that it may draw on additional measures recently outlined in its Financial Stability Report to “mitigate potential risks from the housing market”.
These included regulatory changes to beef up underwriting standards and having its say on whether the government’s Help to Buy scheme should continue.
It added: “Given the increasing momentum, the FPC will remain vigilant to emerging vulnerabilities, will continue to monitor conditions closely, and will take further proportionate and graduated action if it is warranted.”
The FPS also revealed mortgage approvals had risen by 40 per cent in the year to January, while the number of high loan-to-value products had doubled over the past six months, although they remained “low by historical standards”.
Adviser view
Mike Lawton, managing director of Which? Mortgage Advisers, said: “The decline in approvals in February proves that the housing market is not quite the runaway train some are describing, and that things are still tough out there for those trying to arrange a mortgage.”
