Warning of UK housing bubble

Bank of England governor Mark Carney gave his strongest warning yet about the risks of a British housing bubble and said the bank was looking at new measures to control mortgage lending amid a shortage of home building.

The British housing market has “deep, deep” structural problems, chief among them insufficient construction of new homes, Mr Carney said.

“When we look at domestic risk, the biggest risk to financial stability, and therefore to the durability of the expansion, those risks centre in the housing market and that’s why we are focused on that,” he said. Helped by a recovery in the economy, record-low interest rates and government schemes to help home buyers, British house prices jumped about 10% in the 12 months to April, raising concerns that buyers will take on too much debt.