The PRA has issued a short statement concerning the Financial Policy Committee (FPC) using its powers of direction over loan to value (LTV) and debt to income (DTI) ratio limits for owner-occupied mortgages.

The statement mentions that in the event of the FPC using these direction powers, the PRA expects to base its approach as far as possible on the framework established to implement the FPC’s 2014 Recommendation on LTI ratios in mortgage lending. The PRA consulted on its implementation approach to the FPC’s 2014 Recommendation on LTI ratios in Consultation Paper 11/14 and finalised it in Policy Statement 9/14.

The PRA states that it would normally consult when implementing an FPC direction, at which point it would explain the exact implementation approach in more detail.

View The PRA’s intended implementation approach to FPC Directions on loan to value and debt to income ratio limits, 10 July 2015