The Bank of England is weighing a change to its mortgage lending rules that could provide a boost to the UK housing market. According to a report by the Financial Times, the central bank’s Financial Policy Committee is reviewing whether to raise the threshold for high-risk mortgage loans from 4.5 times to five times a borrower’s household income.
The potential adjustment comes amid pressure from lenders and the government, which have been advocating for looser restrictions. Since 2014, banks have been limited to offering no more than 15% of mortgages to borrowers seeking loans above the current threshold.
If approved, the change would mark a significant shift in the UK’s mortgage lending landscape, potentially making homeownership more accessible for some buyers. However, the move also raises concerns about increased financial risk for borrowers and lenders alike.