Responding to today’s Bank of England proposals to place a cap on the proportion of home loans that can be lent at high multiples of income, HFS Chief Executive Philip Hogg (right), said:

“We are pleased that the Bank of England has listened to calls for a targeted response addressing areas where house prices are at significantly higher multiples to income and support the principle of sustainable, responsible lending.

“As all commentators have recognised, there are no signs of a housing bubble in Scotland where market recovery is still very fragile.

“This is in stark contrast to conditions in London where prices have increased by nearly 20% and it is here that the lending cap will have most impact as has been highlighted by the Council of Mortgage Lenders which reports that 19% of new loans are 4.5 times income in London compared to 9% nationally.

“Ultimately, however, and as both the Governor and Chancellor have recognised, there is only one way to tackle pressure on house prices and that is to significantly increase the supply of new homes.”