Osborne plays down claims of a bubble in UK housing market
UK Chancellor of the Exchequer George Osborne denied there is a bubble in the UK housing market and said he would listen to any concerns voiced by the Bank of England.
"Of course we have to be vigilant, and we have a system for that, but there is not that issue today," Osborne told Parliament's Treasury Committee in London yesterday.
British government initiatives to boost the housing market have helped fuel a home-buying boom that led the Bank of England to end incentives for mortgage lending. Governor Mark Carney pledged this week to maintain vigilance over the risks easy money might create for the housing market.
The Conservative-led government in October brought forward its Help to Buy mortgage-guarantee programme, which enables buyers to take out a loan with a down payment of as little as 5pc on all homes valued up to £600,000 (€712,000). Mr Osborne has asked the BOE's Financial Policy Committee to carry out an annual review of the programme, which has been criticised by some lawmakers and the International Monetary Fund.
Mr Osborne said Help to Buy was intended to help families struggling to get on the housing ladder outside the high-value areas of London and south-east England. Demand from foreigners for London housing has pushed up values in the capital.
The Royal Institution of Chartered Surveyors said this week its gauge of house prices has risen to its highest in more than a decade.
"The answer for this country, in my view, is we need more homes," Osborne said, adding he would remain "vigilant" to any concerns on house prices. (Bloomberg)