IMF urging Britain to act on bubble risk

The International Monetary Fund (IMF) has called on Britain to cool its housing market by reining in risky mortgages, the strongest warning yet from an international organisation about the risk of a property price bubble.

So far, there have been few signs of a credit-driven bubble in British house prices, the IMF said.

But that could change fast and lenders should offer fewer mortgages that are far larger than borrowers’ incomes, it warned in an annual report on Britain’s economy published yesterday.