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MoneyBank of England says it is should be watching mortgage price war 'like a hawk'

04:35  27 may  2019
04:35  27 may  2019 Source:   reuters.com

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Bank of England says it is should be watching mortgage price war 'like a hawk' © Reuters/Hannah Mckay FILE PHOTO: A man walks past the Bank of England in the City of London

LONDON (Reuters) - Regulators are watching a price war in mortgages like a "hawk" and may need to slap stricter minimum capital requirements on lenders, Bank of England Deputy Governor Sam Woods said on Friday.

The price war may be good news for consumers wanting to buy their first home, but it was less good for a bank concentrated in mortgages, Woods told the Building Societies Association.

High loan-to-value ratios and higher loan-to-income home loans can be well captured by the BoE's capital requirements.

"But we should be watching them like a hawk," Woods said.

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Falling capital levels have been seen at lenders who use their own computer models to work out the riskiness of loans on their books and therefore how much capital to hold.

"The amount of capital being set aside to cover mortgages has been falling," Woods said.

The BoE's supervisors were making strenuous efforts to check on how models are being used.

"Still, I think we should approach this trend with a very skeptical eye and need to consider whether there is a case to impose more floors in firms’ models, particularly given the current stretch in some measures of house price valuation," Woods said.

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Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'
Bank of England says it is should be watching mortgage price war 'like a hawk'

MSN UK are Empowering Happiness for mental health awareness month. Find out more about our campaign and the charities working to stop people falling into crisis here.

(Reporting by Huw Jones)

UK house prices show biggest annual rise since Jan 2017 - Halifax.
UK house prices show biggest annual rise since Jan 2017 - Halifax

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