Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what specific plans he has to tackle the rise of mortgage debt for young people which take account of the relatively higher level of such debt than in previous generations.

The share of households, including young people, with mortgage debt-servicing-ratios above 40% of income – the level often associated with a higher risk of repayment difficulties – remains low at 1.5%, and well below the levels seen before the financial crisis. Secured debt as a proportion of income was 104% in Q4 2017, down from a peak of 120% in Q1 2008.

The Bank of England’s Financial Policy Committee’s (FPC) 2014 owner-occupier mortgage market recommendations guard against the risk of a marked loosening in underwriting standards and a significant increase in the number of highly indebted households, including among younger households. These include a limit on lending at high loan-to-income ratios, and the requirement that all new mortgage loans are stress-tested against the effect of a rise in interest rates.

The FPC will continue to monitor risks to UK financial stability from UK household indebtedness and regularly reviews the calibration of its macroprudential tools.