Bank of England  

BoE would relax affordability rules if house prices rose

The bank’s ‘upside scenario’ is at odds with today’s reality, however, as just this week Nationwide’s house price index showed UK annual house price growth remained below 1 per cent for the seventh consecutive month.

But some industry experts have commented that the BoE’s stress testing criteria is too stringent, even in the current climate.

Last month, broker firm John Charcol urged the bank to rethink the "anachronistic" way mortgage applications are stress tested to allow more consumers to access the market.

Its argument was founded on the fact the base rate had remained below 1 per cent for more than 10 years and that a 3 per cent stress test was "more in line with the base rate pre-crash".

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