Saturday 20 January 2018

Cameron hints at cooling UK house market

Britain's Prime Minister David Cameron
Britain's Prime Minister David Cameron

Guy Faulconbridge

BRITISH Prime Minister David Cameron gave his strongest signal yet that Britain may need to cool its red-hot property market, saying he agreed with the Bank of England that the housing market was the biggest risk to financial stability.

House prices are soaring in London and have risen by a 10th over the past year in Britain as the economic recovery and record-low interest rates tempt purchasers back into the market. But Bank of England Governor Mark Carney warned on Sunday that the housing market posed the biggest domestic risk to the financial stability of Britain's £1.48 trillion (€1.8trn) economy.

"I agree with everything he said in his interview," Mr Cameron said. "It is absolutely right that we are alert to any dangers and problems."

Mr Cameron also said he would consider scaling back the government's 'Help to Buy' mortgage guarantee scheme if Mr Carney advised such a step would be prudent.

Mr Carney, who has refused to be drawn on whether he sees signs of a property bubble in London, said the British housing market has "deep, deep" structural problems.

Mr Cameron's coalition government has faced calls from the opposition Labour party to scale back its 'Help to Buy' mortgage guarantee scheme which Mr Cameron launched last year. When asked if the government would consider changing the scheme to reduce its upper borrowing limit, Mr Cameron said: "Of course. We will consider any changes that are proposed by Mark Carney."

'Help to Buy' allows people to buy property worth up to £600,000 with deposits as low as 5pc.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business