Nationwide warns of ‘unintended consequences’ of curbing mortgages
Controversial view, if the assumptions in this article are true why not just turn off help to buy in London……
Mr Rennison (of the Nationwide) said that the Bank “are obviously considering what they might need to do” but warned that a clampdown could choke off a recovery in the regions. “If you take a position to cool the London market you can have unintended consequences in places like the North East,” he said. “I don’t sense they believe that’s necessary at present.”
He said it was “implausible” to link the Help to Buy scheme to rising house prices. “It accounts for only 3-4pc of housing transactions, in London it’s 2pc or less.”
Mr Rennison said “certain postcodes” within London are “running pretty hot”, but that the rest of the country was “by no means outside the norm”. House prices increased by 17pc in London in the year to March, compared to 4.7pc outside the South East, according to the Office for National Statistics.
Figures from the Council of Mortgage Lenders published on Wednesday showed that first-time buyers in the capital are borrowing nearly four times their salary to get on the housing ladder. New homeowners borrowed £2.7bn in London in the first quarter of 2014, up 50pc from the same period a year ago. Mr Rennison said the London market was “clearly unsustainable in the long term”.