OECD warns UK to curb its soaring house prices
Britain should take action over soaring house prices, perhaps by scaling back the government's mortgage guarantee scheme, the Organisation for Economic Co-operation and Development (OECD) said yesterday.
Britain's housing market, buoyed by record low interest rates and government-sponsored schemes, has been a driver of the country's surprisingly fast, consumer-led economic recovery.
"Monetary policy tightening should be accompanied by timely prudential measures to address the risks of excessive house-price inflation," the OECD report said. "House prices ... significantly exceed long-term averages relative to rents and household incomes."
House prices surged last month at the fastest pace since the start of the financial crisis and the focus is turning to the Bank of England's ability to prevent a damaging property bubble without raising interest rates sooner than it is planning.
The BoE has mostly played down suggestions the market is overheating. But last week one of its deputy governors, Jon Cunliffe, told bankers that it would be "dangerous" to ignore the rapid rise in prices, which are up nearly 11pc over the past year.
Last month Chancellor George Osborne said vigilance was needed on house prices. (Reuters)