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Business News

Mark Carney sparks 'stampede' for home loans


Mortgage lenders and brokers have enjoyed a "stampede" of borrowing requests since Mark Carney pledged to keep interest rates on hold for the next few years.

Andrew Montlake, director of City mortgage broker Coreco, said the phone had been ringing off the hook since the Bank of England Governor's press conference last Wednesday. At this, the Canadian said the BoE will hold interest rates at their present record low level of 0.5 per cent until the national unemployment rate falls to at least 7 per cent.

The Bank does not expect this target to be hit until the second half of 2016.

Mr Carney's comments appear to have given many businesses and households a nudge to get househunting again.

"We have had an influx of enquiries from borrowers who are looking to take advantage of the low rates on offer, many now asking about tracker rates or lower short-term fixes. I expect the Governors' announcement to lead to a greater stampede of people wanting to take advantage of the record low rates."

A senior figure at a big uk mortgage lender told said Mr Carney's pronouncement was effectively a green light to the housing market, which is already being buoyed by the Help to Buy scheme.

"Focusing on unemployment rather than inflation effectively means the bank will pursue looser monetary policy, which will give borrowers the surety that they are unlikely to see the Bank of England suddenly ramp up interest rates, this is a major step to ensuring the property price growth we are already seeing takes root," he added.

But some were concerned that Mr Carney's comments could precipitate another debt bubble.

"This is the most dangerous development in UK monetary policy since the late 1980s," think tank the Institute for Economic Affairs (IEA) warned. Furthermore, the new Governor's groundbreaking 7 per cent unemployment target risked letting inflation rip, the IEA suggested.