UK finance minister George Osborne is speaking at a Reuters event today, Bank of England Deputy Governor Charlie Bean addresses a conference and we get September’s public finance figures. For Osborne, there are so many question to ask but Britain’s frothy housing market is certainly near the top of the list.
The government is extending its “help to buy” scheme at a time when house prices, in London at least, seem to be going through the roof (no pun intended). Property website Rightmove said on Monday that asking prices for homes in the capital jumped 10.2 percent in the last month alone.
The Royal Institution of Chartered Surveyors has suggested the Bank’s Financial Policy Committee should cap house price inflation at 5 percent a year. A Bank of England policymaker retorted that it wasn’t down to his colleagues to regulate prices.
Osborne has give the Bank a say on pulling the plug on his scheme early but not until September next year. Overnight, the RICS property industry body said house building in Britain is making its strongest recovery in more than 15 years, but supply is still failing to keep pace with demand.
The government and Bank of England insist there is no sign of a bubble inflating but one only needs to look at the volatile history of Britain’s housing market to see why there is widespread concern.