The Bank of England has warned it is keeping a close eye on developments in the housing market and said borrowers and lenders should be careful not to overstretch themselves.
Paul Fisher, Threadneedle Street's executive director of markets, rejected the idea that a property bubble was emerging but stressed that the Bank was alert to the risks to the economy from another boom-bust.
Fisher said the housing market was clearly gathering momentum after years in the doldrums and prices had again started to hit the headlines.
"I must say that don't see any evidence of bubble behaviour as yet, with mortgage lending still subdued relative to what is likely to be normal levels of activity.
The housing market is recovering from a number of years of very low transactions, with house prices having risen well below the inflation rate."
Recent house price surveys have shown that the cost of property is increasing by around 5% for the UK as a whole and by 10% in London.
Fisher said: "It is not surprising if we see an adjustment of relative prices when the market recovers and of course London has special demand pressures which are not present elsewhere in the UK, especially for high-end housing.
But we may well see a response in new housing supply in due course, limiting the effects of demand on house prices. "
David Cameron announced earlier this week that the government had brought forward the second phase of its Help to Buy scheme for mortgages from early 2014 to this month − a move that has led to renewed concerns about a bubble.
"Let me assure you that the Bank will not be complacent about allowing financial stability risks to build through an over-expansion of the housing market. Both borrowers and lenders need to be careful not to overstretch themselves.
In line with the recent financial policy committee statement, we will be keeping a very close eye on developments, and the Bank has a range of tools that can be used in mitigation of those risks."
theguardian.com
Paul Fisher, Threadneedle Street's executive director of markets, rejected the idea that a property bubble was emerging but stressed that the Bank was alert to the risks to the economy from another boom-bust.
Fisher said the housing market was clearly gathering momentum after years in the doldrums and prices had again started to hit the headlines.
"I must say that don't see any evidence of bubble behaviour as yet, with mortgage lending still subdued relative to what is likely to be normal levels of activity.
The housing market is recovering from a number of years of very low transactions, with house prices having risen well below the inflation rate."
Recent house price surveys have shown that the cost of property is increasing by around 5% for the UK as a whole and by 10% in London.
Fisher said: "It is not surprising if we see an adjustment of relative prices when the market recovers and of course London has special demand pressures which are not present elsewhere in the UK, especially for high-end housing.
But we may well see a response in new housing supply in due course, limiting the effects of demand on house prices. "
David Cameron announced earlier this week that the government had brought forward the second phase of its Help to Buy scheme for mortgages from early 2014 to this month − a move that has led to renewed concerns about a bubble.
"Let me assure you that the Bank will not be complacent about allowing financial stability risks to build through an over-expansion of the housing market. Both borrowers and lenders need to be careful not to overstretch themselves.
In line with the recent financial policy committee statement, we will be keeping a very close eye on developments, and the Bank has a range of tools that can be used in mitigation of those risks."
theguardian.com
No comments:
Post a Comment