BOE: FPC Spreads narrow on high but not very high....>

BOE: FPC Spreads narrow on high but not very high LTV ratios 

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     The FPC in its March minutes has noted a gradual loosening in 

credit conditions in the mortgage market in recent years. This is 

witnessed through a tightening of the spread between 90%LTV and 75%LTV 

mortgage products by 34 basis points since 2016 Q1, which is unlikely to 

reflect an improvement in underlying credit quality. The FPC note that 

whilst very high LTV ratios (those greater than 95%LTV), remained 

significantly below pre-crisis levels, the share of lending at LTV 

ratios just below that had recovered from its crisis troughs. However, 

this risk has arguably been offset by weak aggregate demand in mortgage 

borrowing. However, the FPC has seen an increase amount of lending at 

LTIs just below 4.5 which provides slight cause for concern. The minutes 

also showed the FPC is looking to raise the counter-cyclical buffer 

(CCYB) rate to 1% from 0.5%.