Professor Philip Lane:

No, and I will explain why not. There are two reasons. First, when we see a rise in house prices, the question is whether we should reduce that number or recognise that the average house price has gone up and relax the number. That would lead to speculation every year about what we would do with the turning point.

We already have a strong anchor in the system with a limit of three and a half times income. We had a layered track of 10% for first-time buyers with only 5% of exceptions. We tightened the ability to go above that limit. The figure was 18% for second-time buyers and 30% for buy-to-let mortgages. That is a fairly severe set of deposit requirements.

The second point is more empirical. There was not much lending caught by the rule because at that point we had many exceptions to the rule. From memory, only 11%, approximately, of first-time buyers were actually being caught by that rule. People had more in deposits than was needed – we discussed this point earlier. Many first-time buyers have more than they need on deposit. They were not caught by the rule. Many people below the rule were getting exceptions. Not many people were being caught by the rule.