Fears of a housing bubble have been dismissed as “hype” by a key Bank of England policymaker, just days after governor Mark Carney said the bank was prepared to intervene to cool an overheated property market.
The remarks by Paul Fisher appear to suggest that conditions are a long way off a point where the action threatened by Mr Carney to keep a lid on unsustainable price growth would be necessary.
His comments in a newspaper interview come as Halifax figures showed house prices were 5.4% higher than last summer.
Mr Fisher, the bank’s executive director for markets, acknowledged that it was “crucial” to keep an eye on house prices but added: “So far, I don’t see evidence of any bubble behaviour.”
He said the market had been suffering for many years from very low transactions with price rises well below the inflation rate and that housing supply was likely to increase as the market picked up.
He added: “What I see at the moment is a lot of media hype about some of the hotspots in London, which are really there for local reasons. It’s when you start hearing of the 105% or 110% loan-to-value ratio that you start to get worried.”