United Kingdom: Financial Sector Assessment Program-Property Markets and Financial Stability-Technical Note
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Summary:
The main purpose of this paper is to assess the risks to the financial sector that currently emanate from the United Kingdom property markets. The interaction of property markets with financial markets has important implications for financial stability. Cycles in the prices of housing and commercial property affect the balance sheets of households, banks, and other financial institutions. Excessive lending and price swings in property markets can cause significant distress to both borrowers and lenders. A drop in prices of real property weights on firms’ access to finance, which can reduce economic activity, leads to further declines in asset prices and potential financial stability risks.
Series:
Country Report No. 2016/157
Subject:
Banking Debt service ratios External debt Financial institutions House price indexes Housing Housing prices Mortgages National accounts Prices
English
Publication Date:
June 17, 2016
ISBN/ISSN:
9781484393727/1934-7685
Stock No:
1GBREA2016005
Pages:
24
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