A potential change to affordability checks by the Bank of England may further inflate a housing bubble, pushing house prices to unsustainable levels, specialist lender Together has warned.
Yesterday it emerged that the Bank of England is understood to be considering softening mortgage affordability checks as part of a review of market restrictions that concludes next week.
Sundeep Patel, director of sales at Together said: “With another increase of 1% in November, house prices continue rise with the average house price now sitting at a record £272,992.
“Government interventions like stamp duty holiday, largely the reason for inflated prices, have ended earlier in the quarter, yet we continue to see a surge in demand. Talks of The Bank of England loosening affordability checks may further inflate a housing bubble, pushing house prices to unsustainable levels.
“Economic volatility coupled with a supply chain crisis could lead to further turmoil as builders faced with material shortages, struggle to k”eep up with the demand for new properties, resulting in a shortage of supply.
With the focus on the holidays, sellers and buyers may put on the brakes and reassess their property plans later in 2022 but widespread uncertainty lingers as we head into the New Year. Specialist lenders can expect to be highly sought after as borrowers seek financial support in the months ahead.”
