In the UK, where the annual increase in house prices amounted to approximately 4 per cent the second quarter this year, the ratio of debt to disposable income is around 150 per cent. In Sweden, house prices have more than doubled in the past decade, with a par-ticularly strong increase in metropolitan regions. Part of the explanation is that household incomes have also risen rapidly in this period. It is reasonable to assume that house prices follow income in the long run. What gives some cause for concern is that house prices and household debt have both been rising very much faster than income and have continued to do so this year. At the end of the second quarter this year, house prices had risen by more than 7 per cent and house-hold debt by over 10 per cent compared with a year ago. Since 1995, house prices and debt have both risen over 40 per cent more than income. The pertinent issues have mainly been whether there are “bubbles” in the housing market in the sense that house prices have deviated markedly from what can be motivated by underlying factors such as disposable income and interest rate costs, and whether households have taken on too much debt in relation to their future ability to pay. Another question that has come up in recent years in Sweden, as well as in England and elsewhere, is why the strong credit growth and rising house prices have not been accompanied by increased consumption.
30 November 2017  Speech on the 60th Anniversary of the National Association of Specialised Lending Institutions (ASNEF) Luis M. Linde Governor  Good evening everyone. It is a pleasure for me to take part in this celebration of the 60th anniversary of the National Association of Specialised Lending Institutions. As your president, Fernando Casero, has just mentioned, throughout its history your Association has played a very important role in promoting and enhancing consumer lending, which is a key factor in driving economic growth. Indeed, consumer lending has a series of characteristics that make it especially relevant both for the financial system and economic activity. On the one hand, it is highly cyclical and is, therefore, a leading indicator of confidence among both consumers and financial institutions. On the other, it generally leads the way in terms of adaptation to innovation. As is well known, in the past consumer lending played an important part in the expansion of credit cards, and more recently it has been at the forefront of the incorporation of new technologies. In the expansionary phase that began after 2000, consumer lending grew rapidly in Spain, reaching a balance outstanding of € billion in mid-2008. The financial crisis reduced these figures, down to almost half that amount by early 2015. Since then, in keeping with the economic recovery, consumer lending has been very dynamic.