Oct 21 (Reuters) - It should not be the Bank of England's job to regulate house prices, a BoE policymaker said on Monday.
The BoE's Financial Policy Committee (FPC), tasked with spotting and pricking asset bubbles before they become damaging, has come under pressure to rein in Britain's housing market.
Asking prices for homes in London jumped 10.2 percent between early September and early October, property website Rightmove said on Monday, even as gains in most other parts of the country lagged inflation.
The rise, the biggest monthly jump since the series began in 2002, took annual price growth in the capital to 13.8 percent.
Martin Taylor, an external member of the FPC, said he had been "astonished" that the Royal Institute of Chartered Surveyors has suggested the FPC should cap house price inflation at 5 percent a year.
"I don't think, personally, that it should be the FPC's job to stop house prices going up," Taylor said in a speech.
"Indeed, if you have an economic recovery, rising numbers of households and very tight supply - all of which we seem to have at the moment - it would be surprising if they didn't." The watchdog said in September there was no immediate danger of a housing bubble.
"We are watching for signs of over-extension on the part of the banks and the public, especially signs that borrowers were not in a position to withstand an eventual rise in interest rates, signs in general that a more speculative market might be developing: these might be expected to attract our attention," Taylor, a former CEO of Barclays bank, said.
The FPC will review next September a government backed Help to Buy scheme to free up mortgage lending. It can dampen activity by forcing lenders to hold more capital.
Taylor said only 11 percent of people surveyed in July had heard of the FPC, created in the aftermath of the 2007-09 financial crisis and put on a formal legal footing in April.
This low visibility could change if the watchdog did something about about the "more excitable conditions now visible in the housing market in some parts of the country", Taylor said.
reuters.com
The BoE's Financial Policy Committee (FPC), tasked with spotting and pricking asset bubbles before they become damaging, has come under pressure to rein in Britain's housing market.
Asking prices for homes in London jumped 10.2 percent between early September and early October, property website Rightmove said on Monday, even as gains in most other parts of the country lagged inflation.
The rise, the biggest monthly jump since the series began in 2002, took annual price growth in the capital to 13.8 percent.
Martin Taylor, an external member of the FPC, said he had been "astonished" that the Royal Institute of Chartered Surveyors has suggested the FPC should cap house price inflation at 5 percent a year.
"I don't think, personally, that it should be the FPC's job to stop house prices going up," Taylor said in a speech.
"Indeed, if you have an economic recovery, rising numbers of households and very tight supply - all of which we seem to have at the moment - it would be surprising if they didn't." The watchdog said in September there was no immediate danger of a housing bubble.
"We are watching for signs of over-extension on the part of the banks and the public, especially signs that borrowers were not in a position to withstand an eventual rise in interest rates, signs in general that a more speculative market might be developing: these might be expected to attract our attention," Taylor, a former CEO of Barclays bank, said.
The FPC will review next September a government backed Help to Buy scheme to free up mortgage lending. It can dampen activity by forcing lenders to hold more capital.
Taylor said only 11 percent of people surveyed in July had heard of the FPC, created in the aftermath of the 2007-09 financial crisis and put on a formal legal footing in April.
This low visibility could change if the watchdog did something about about the "more excitable conditions now visible in the housing market in some parts of the country", Taylor said.
reuters.com
No comments:
Post a Comment