Cameron: Government primed to take action if housing bubble fears are realised
He says Mr Carney is right to flag up the issue, but stressed it was the bank’s job to identify asset price bubbles and “act on them”, he added.
The Resolution Foundation, a not-for-profit research and policy organisation which says its goal is to improve outcomes for people on low and modest incomes, has estimated that 770,000 vulnerable households could be “imprisoned” by a limited ability to switch to another mortgage deal when interest rates begin to rise, which is expected in 2015. That represents about one in 10 mortgage holders in the UK.
According to the Office for National Statistics, UK house prices rose by eight per cent in the year to the end of March.
The Bank has been asked to examine the effect of the government’s Help to Buy scheme, which enables people to take out mortgages on homes worth up to £600,000 with a deposit of just five per cent, and Mr Cameron promised: “We will consider any changes that are proposed.”