United Kingdom: Financial Sector Assessment Program-Property Markets and Financial Stability-Technical Note

June 17, 2016

Preview Citation

Format: Chicago

United Kingdom: Financial Sector Assessment Program-Property Markets and Financial Stability-Technical Note, (USA: International Monetary Fund, 2016) accessed November 8, 2024

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.

Subject: Banking, Debt service ratios, External debt, Financial institutions, House price indexes, Housing, Housing prices, Mortgages, National accounts, Prices

Keywords: Commercial real estate, CR, CRE price reversal, Debt service ratios, Global, House price growth, House price indexes, House-price shock, Housing, Housing prices, ISCR, Lending, Mortgage lending, Mortgage rate, Mortgages, Price, Property market, U.K. BTL sector

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2016/157
Stock No:

1GBREA2016005
ISBN:

9781484393727
ISSN:

1934-7685

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