Carney to be 'vigilant' on house prices
Bank of England governor Mark Carney has told MPs "we do need to be vigilant" on house prices.
Addressing the Treasury Committee he said the central bank had a "considerable range of policy options" that would start with "more intensive supervision of mortgage lending".
There have been some concerns that government measures to support the housing market could lead to a bubble.
Mr Carney said not all of the country had seen a recovery in house prices.
He stressed that across the nation, house prices in many areas were only at two thirds or three quarters of pre-crisis levels.
"There are big pockets of the country where there has not been any meaningful recovery," he added.'Inflationary pressures'
He added that dealing with a house price bubble would be the job of the Bank's new Financial Policy Committee.
If tighter supervision did not work, he said that in an extreme situation the Bank could force mortgage lenders to set aside more capital, which would reduce the amount they were able to lend.
But he said that the central bank did not have the power to order lenders not to offer mortgages above a certain percentage of the value of a property.
The Business Secretary, Vince Cable, is one of those concerned about the effects of the Help to Buy scheme, which was announced in the Budget.
He said there were already signs of "serious housing inflationary pressures" in parts of the country.
The government said that the Help to Buy scheme - which provides government backing for mortgage deposits initially for newly built properties - was an important way of helping people who could not own a home because 95% mortgages are not currently available.
Figures on Thursday showed that the number of mortgages advanced to first-time buyers in July increased by 41% compared with a year ago, but the numbers remain well below peak levels.'Stimulus working'
Mr Carney refused to be drawn on whether the economy had turned the corner, as the Chancellor, George Osborne, said it had.
He said that we "shouldn't be satisfied" with this recovery, but added that, "the economy is picking up and the stimulus is working".
He also said that when the time came for the Bank of England's Monetary Policy Committee to reduce the stimulus in the economy, it would raise interest rates before it started selling any of the bonds it has bought as part of its programme of quantitative easing.
But at the moment he stressed that such a time is far off and that the committee is "still considering additional stimulus".