The nobility also retained men meaning that they could call up men who voluntarily contracted and obliged to fight, so since there was no British army at the time the king did rely on the nobility to provide solider when needed. As you can see the nobility had main stream control of their community, so it is no surprise that these nobles could become over mighty as seen in Richard III reign for example Henry Stafford of Buckingham plotted to over throw Richard III.
When Henry seized the crown from Richard III at Bosworth, he knew that his own survival depended upon his dealing with the great noble families. Historians such as J. R Green and A. E Pollard have suggested that Henry saw the nobility as a danger, so he set out to control them ruthlessly. But unlike his predecessors Henry VII did not try to win the loyalty of nobility but the other way round, to obtain royal awards from the king then you would have to show years of loyal service for example the Earl of Oxford were rewarded for their loyalty during Henrys exile.
However if you were not loyal to Henry then many consequence that could follow. The first and most common used by Richard III as well in Buckinghams rebellion was Act of Attainders, which is a act of parliament to declare someone guilty of a particular crime against the Crown usually treason. This allowed the crown to seize the persons title and all their possessions. John Guy (Tudor England) statistic show that Henry awarded 138 attainders in his reign however unlike other kings before him Henry showed his calculated mercy by revering the attainder for good behaviour.
Henry VII realised that he could not just use attainders to gain control because it would only lead to outrage between nobles so mischievously he gave back the land for being loyal to him hence he could gain loyalty from that noble but also gain credit and respect from other nobility. This could be demonstrated noticeably when Henry appointed Thomas Howard the earl of Surry who fought for Richard III and ended up in the tower of London, as Lord Chancellor for good behaviour.
Another way for Henry to gain control of disloyal and over mighty nobles were making them sign a written document binding them to give money if they broke the condition of the bond. Henry made the leading men of the country sign these, this meant they were at his mercy if they broke the contract which could lead to crippling fines. For example Marquis of Dorset was believed to have a connection with the Simnel conspiracy and was made to sign a bond totalling to i10,000 as a pledge of good behaviour.
Some other ways of getting elegance from the nobility was to gain recognisance which was a formal debt or some sort of obligation; it could be enforced by means of heavy penalties. Livery and Maintenance were neither new practise and they have been in use for generations; kings before Henry had also tried to control both practises. Livery was the badger from a gentlemans or noblemans coat of arm which was sign that they were in service.
It could be used by a noble to control his locality or to provide men for the kings army in time of rebellion or war. However during the Wars of the Roses it showed that powerful lords could be manipulate the law in their own gain. So from the beginning of Henrys reign he made it clear that he wished to control retaining this was followed by Parliaments of 1489 and 1504 passing laws against it. Acts intended to prevent unlawful retaining, those who went against this law would be punished harshly for example Lord Burgavenny in 1506 fined i??
70, 550. The point of this case was to deter others form keeping over large armies and to punish noble whose loyalty Henry had suspected. Henry had various ways of keeping the nobility in check and there was always a element of threat for the nobility by the crown in Murphy said out of the 62 peerage families in existence during Henry VII reign, the majority were at his mercy, through act of attainders, bonds and recognisances for at least some of the time.
Alexander Grant who wrote pamphlet Henry VII (1985) concluded that recognisances were the basis of a techniques exerting control over the nobility through a system of suspended sentences requiring good behaviour, which could , in the most serious cases threaten complete ruin for a magnate if he displeased the king. I totally agree with Alexander Grant, acts of attainders etc. were tools to get the nobility to behave themselves, but unfortunately he did not always get the a oath of allegiance from the nobility as out of the 138 attainders only 46 were redeemed.
In my opinion I believe that Henry did succeed in controlling the nobility not by limiting the number of peerage he handed out but how he enforced law against them to stop rebellions. Henry did recognise that the nobility was a important factor in running the country however he did place limits that were not so severe that it would cause an uproar but enough to stop the over mighty nobles from causing an uprising.
Henry calculated mercy was especially a key factor in keeping the nobility feeling that Henry was not anti noble but also Henry was able to gain a lot of loyalty from it as well. Murphy concluded that Early Tudor England was a society that believed in good rule from above and in providing this for his subject Henry VII nobility played a key role. Following on from this I would also agree that the relationship between nobility and King was a better than those in the War of the Roses and Henry had successfully maintained control of the nobility.