The Bank of England (BoE) and HM Treasury have decided to scrap the Funding for Lending Scheme (FLS) for mortgage lending in an attempt to guard against the risk of another housing bubble.
Mark Carney, the bank’s governor, said the scheme would not apply to household lending from February next year, warning that rising house prices could derail the recovery.
“The recovery in the market has broadened out across the UK; the question is where does it go from here,” Carney said. “By acting now, authorities are reducing the likelihood that larger interventions will be needed. It is no longer appropriate to have our foot on the accelerator.”
The change comes at a time when...
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