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BoE governor claims he may still curb house prices

11 December 2013

The governor of the Bank of England (BoE) has once again claimed he will have no hesitations in acting if the rise in house prices continues.

Mark Carney today spoke out about the current trend that has had many market experts worried about a bubble developing.

At a conference that was held at New York's Economic Club, he indicated his concerns and alluded to his experiences of previous price accelerations that ultimately led to a crash.

He said: "There is a history of things shifting in the UK and the housing market of moving from stall speed to warp speed and underwriting standards slipping. So we want to avoid that."

Mr Carney's comments came following a new piece of research by the Royal Institution of Chartered Surveyors, which revealed the UK's biggest surveyors haven't been so confident of continued price rises since 1999.

The boom was facilitated in April when the government announced its Help to Buy Scheme, which used financial supplements to make it easier for first-time buyers to obtain a mortgage. Since then, the increased demand has seen prices rocket.

Just two weeks ago, the BoE was already demonstrating a cautious approach by reining in the conditions of its Funding for Lending Scheme. It will now only offer the financial incentives to businesses that are struggling to find funding elsewhere, as opposed to mortgage lenders.

Mr Carney went on to say the BoE would not be scared of taking further measures if the trend began to become too much of an economic risk, but the Council of Mortgage Lenders seemed keen to dispel any worries.

Officials from the industry body claimed an "unbridled" boom would be "unlikely", despite predictions of a gross mortgage lending increase of £35 billion in the next two years.

As growth in the housing market looks set to continue, landlords insurance customers may find an increasing number of tenants looking to get on the property ladder and leave the rental market.