Carney warns homeowners

Homeowners must sort themselves out to pay their mortgages if interest rates rise because they will not be guaranteed a helping hand, Bank of England governor Mark Carney has warned.

Carney concern at lack of new-build properties

The new Bank of England governor, Mark Carney, has expressed his concern about the lack of new homes being built in the UK citing that there is a strong demand among would-be buyers to get on the property ladder.

It is hoped that strategic decisions made now to try to control mortgage lending will avoid the need for severe and drastic policy actions to be taken if there is a boom-bust in the property market.

Mortgage approvals are running at levels not seen since Northern Rock was nationalised in February 2008.

The right way to do policy - to protect against the boom and bust cycles - is to act early in a graduated, proportionate way and that reduces the probability of having to act in a bigger way later.

– The new Bank of England governor Mark Carney speaking in an interview with the Guardian

Bank of England governor in warning to homeowners

The Governor of the Bank of England Mark Carney.
The Governor of the Bank of England Mark Carney. Credit: Stefan Rousseau/PA Wire/Press Association Images

Homeowners must sort themselves out to pay their mortgages if interest rates rise because they will not be guaranteed a helping hand, Bank of England governor Mark Carney has warned.

He urged would-be homeowners to think of "the debts you are taking on" and being able to repay a 25 year or 30 year mortgage rather than relying on the value of the house price increasing.

He told the Guardian: "Are you going to be able to service that mortgage five years from now, 10 years from now, if interest rates are higher?

"Or are you counting, even subconsciously, on the price of your house keeping going up and if something happens an ability to sell it quickly and not facing the consequences of not being able to pay?"

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