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Conversations about the so called soft-cap keeping turning up in threads where they really have no place, so I figure we can keep that debate focussed by keeping it in one place. This is the kind of view that I see expressed on one side of the debate: Source As best I understand it the argument rests on something about the average LTI in 2014 Source It then appears to run something like this - by introducing a soft cap of no more than 15% of new lending at more than 4.5x the Bank of England was both normalising lending at 4.5x household income and calling for more lending (i.e. hoping to move the average up). First up, Democorruptcy - do I have your argument right? Secondly, can you remind me of the source of the 3.2x figure. I take the view that when the Bank say that they are concerned about excessive lending at high LTIs and cap it and then get stuck into BTL because they figure that BTL is driving owner-occupiers to higher LTIs then what they are trying to achieve is to make sure that owner-occupiers don't run to massive LTIs whilst chasing up house prices, (because they are concerned that an already terrible situation not become even worse). -
Found this to be interesting, if not entirely surprising - it is generally very supportive of long held views on here. http://bankunderground.co.uk/2015/09/03/local-housing-booms-and-busts-in-england/