Mortgages  

BoE could comment on Help to Buy ‘at any time’

Responding to a letter written by Andrew Tyrie, chairman of the Treasury select committee, Mr Carney confirmed that the monetary policy committee has no power of veto over the housing initiative.

Mr Tyrie’s letter had asked Mr Carney to clarify where the MPC’s powers lay in relation to the scheme.

Mr Carney said the BoE would, however, make recommendations on whether the scheme’s current rules on a house charge cap and lenders’ fees should be revised, as well as whether it should be extended beyond its current three-year life.

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This follows news that, in October, the MPC was asked by chancellor George Osborne to monitor the Help to Buy scheme every autumn to prevent overstimulation of the housing market, particularly in London and parts of southern England where house prices are already rocketing.

Commenting on the publication of the letter, Mr Tyrie said: “The BoE has clarified that it will offer advice only with respect to any risks that may be posed by the scheme to financial stability, and to the safety and soundness of firms. The BoE could already, and should, offer such advice whenever appropriate.”

Adviser view

Malcolm Davidson, independent financial adviser at East Yorkshire-based Hullmoneyman.com, said: “We must make sure that Help to Buy is not limited to first-time buyers. We shouldn’t forget there are many people on the property ladder who do not have enough equity in their current homes to take the next step up.”