28  Companies’ responses are translated to impacts using the assumptions described under Chart 30. 27  All speeches are available online at www.bankofengland.co.uk/speeches  27  Chart 30: Bank of England Agents’ Survey of impact of different Brexit scenarios Approximate estimated change (%) 3 Deal and transition 2  No deal and no transition  1 0 -1 -2 -3 -4 Output  Employment  Investment in UK  Exports  Sources: Bank of England and Bank calculations. Notes: Chart shows aggregated results from surveys from December 2018 to April 2019. Companies were asked ‘Relative to the last 12 months, what is the likely impact on the following for your business over the next year in each scenario: a deal and transition period and no deal and no transition period?’ For each relevant business factor, respondents were asked to choose between ‘Fall greater than 10%’; ‘-10 to -2%’; ‘Little change’; ‘+2 to +10%’ and ‘Rise greater than 10%’. Responses weighted by employment. Half weight was given to the +/- 2-10% response and full weight was given to those that responded 'Rise/fall greater than 10%'. The approximate estimated change for output, employment, investment and exports are based on a simple calculation assuming a midpoint figure for each of the response categories. For “Fall greater than 10%” the mid-point was -15%; for “-10 to -2%” the mid-point was 6%; for “Little change” the mid-point was 0%; for “2 to10%” the mid-point was +6%; for “Rise greater than 10%” the mid-point was +15%.
It will take time for the measures introduced to affect all households with mortgages It is now important to take measures to improve the long-term functioning of the housing market, which will both reduce the risks we find worrying and also create the conditions for the healthy development of society. Measures within several policy areas will be needed to achieve this. One area where we have seen measures is macroprudential policy. Finansinspektionen (the Swedish financial supervisory authority) has taken measures to reduce the risks inherent in household indebtedness and to increase resilience against shocks. This is welcome and positive. However, the measures introduced, such as a loan-to-value limit and amortisation requirements, affect new loans only, and it will therefore take time before they affect all households with mortgages. Some of the macroprudential policy measures have also been criticised. Among other things, the amortisation requirements have been accused of making it difficult for some groups, such as first-time buyers, to enter the housing market, as the requirements restrict households’ scope for borrowing. This is, however, part of the aim of the amortisation requirements and, without these restrictions, household indebtedness would also risk continuing to increase at an excessively rapid rate. Without an effective macroprudential policy, borrowing households would choose to borrow more and demand more housing, without considering that, when all borrowers behave like this, housing prices are pushed upwards. 4 Higher housing prices mean that borrowers must cut back on other consumption and work more, which decreases their welfare over the long term.