Santander UK Plc and Barclays Plc said they don’t plan to implement the kind of curbs on riskier home loans imposed by Britain’s two largest nationalized lenders.
Lloyds Banking Group Plc, the U.K.’s biggest mortgage lender, and Royal Bank of Scotland Group Plc have said they will limit customers to a maximum of four times income on mortgages of 500,000 pounds ($836,500) or more to counteract house price inflation in the U.K.’s property market.
Bank of England Governor Mark Carney has warned housing poses the biggest risk to Britain’s economy. U.K. house prices rose to a record last month and recent indications of a slowdown in the market may prove short lived, according to Nationwide Building Society. Values increased 0.7 percent from April to an average 186,512 pounds, the lender said yesterday.
“Barclays will lend up to 5.5 times income in certain scenarios,” Alan White, a bank spokesman for the U.K.’s fourth-largest mortgage lender, said in an e-mailed statement today. “Affordability is the most important factor in assessing and approving a mortgage.”
Santander UK, Britain’s second-largest mortgage lender, also said it plans no such restrictions. “All our lending decisions are based on affordability,” Andy Smith, a Santander spokesman, said in an e-mailed statement.
Nationwide, the U.K.’s biggest customer-owned lender, Yorkshire Building Society and Co-Operative Bank Plc said they don’t plan to introduce caps on mortgage lending, either.
The Bank of England’s Financial Policy Committee, which is in charge of maintaining financial stability and considers house price inflation, will meet at the end of the month.
“They might feel they don’t need to act at this point,” said Andrew Montlake, a director at mortgage broker Coreco Partners LLP. “All of this stuff is helping change the sentiment of people, and that’s what’s most important in the market.”