EXPECTATIONS of future house price rises have hit a 14-year high just as Bank of England chief Mark Carney signalled monetary policy would remain exceptionally loose despite the potential for them to jump at “warp speed”.
Britain is growing faster than many other big rich economies although it has still not passed its pre-crisis peak. There are some concerns, however, that it is a housing-led recovery – and a potential bubble – spurred by Government stimulus.
The Royal Institution of Chartered Surveyors (RICS) said yesterday that 59 per cent of UK surveyors in November forecast prices would rise over the next three months, the highest reading since September 1999.
In Yorkshire, expectations for house price rises hit an 11-year high, as demand continues to far outstrip supply, with further rises predicted.
Speaking in New York ahead of the survey, Mr Carney signalled that monetary policy was not about to be tightened even though there were potential dangers in the housing market.
“We’re concerned about potential developments in the housing market,” Mr Carney said. He said activity in the housing sector was lower than before the financial crisis, and bank underwriting standards had been “substantially transformed”.
“But 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.”
Separate data showed Britain was making some progress in slowly reducing its reliance on consumers.
Manufacturing output rose for a second month in October but the country’s trade deficit was bigger than forecasts.
In an upbeat message before the Christmas season, Mr Carney said Britain’s recovery was showing signs it can reach self-sustaining momentum but no tightening was on the horizon.