Mark Carney says UK housing market in widespread recovery

Mark Carney Mark Carney said there was little he could do to cool the London market

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Bank of England governor Mark Carney says the UK housing market is generally recovering.

Mr Carney told the BBC's Andrew Marr programme that, looking at the UK as a whole, "we are now seeing house prices begin to recover, so it is a more generalised phenomenon".

He said the only area where prices had not picked up was Northern Ireland.

He also said there was little the bank could do to cool the London market, where prices were rising far faster.


Prices in London are rising by about 10% a year, but Mr Carney said a change in interest rate policy - not on the cards in any case until the recovery is well established - would not cool the market as a significant number of properties were bought without a mortgage.

Asked if he was concerned about the very fast-spiralling London property market, Mr Carney said: "Much of what's driven in London, of course, is not mortgage-driven but is cash-driven.

"It's driven, in many cases, by foreign buyers. We, as a central bank, can't influence that.

"We change underwriting standards - it doesn't matter, there's not a mortgage. We change interest rates - it doesn't matter, there's not a mortgage, etc.

"But we watch it and we watch the knock-on effect."


Mr Carney reiterated his belief that UK interest rates would not return to pre-crisis levels of around 5% until all spare capacity was being used in the economy.

He said: "What we've had thus far is a consumer-led recovery.

"What we haven't seen yet is business investment picking up.

"It's part of the reason why we're trying to provide as much clarity to business that the path of monetary policy, the path of interest rates, is going to be calibrated very carefully, to ensure that only when we see sustainable growth in jobs, in incomes, and in spending will we make adjustments."

Last week, Mr Carney overhauled the Bank's interest rate policy to reflect falling unemployment and the economic recovery.

The Bank's rate policy will now be determined not just by unemployment, but by a wider range of indicators.


Mr Carney also discussed bankers' bonuses, saying new rules ordering banks to keep back more capital could hold back bonus payouts.

He said the rules, designed to protect banks from future economic shocks, would prevent them from paying increased bonuses if that would cause capital levels to fall.

The rules, known as Basel III, will come into force near the end of this decade and will apply internationally.

Mr Carney said they would have a real impact and should change banks' behaviour.

He also suggested that bonuses could be deferred for an even longer period than the current three to five years, giving a greater time frame in which they could be clawed back, should it emerge later on that unnecessary risks had been taken.

Last week, Barclays increased its bonus pool despite posting a fall in annual profits.


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  • rate this

    Comment number 408.

    378. Excuse Me Please 'In my mind there is no doubt that unless more affordable houses are built & built quickly social unrest may ensue.'

    No problem, but don't ask me to pay a penny ! if you want to build them, then you pay for them ! Or increase council house rents 100 % to fund them. just do not come expecting hard pressed tax payers to fund yet more benefits and freebees ! work and save !

  • rate this

    Comment number 407.

    I think that Mr Carney is a little confused !
    The housing market was starting to recover by slowly returning to its long term average. However Gidiot and Carney between them are determined to create a new financial disaster by artificially pumping up the housing market. Higher prices, greater debt, more risk and eventual catastrophe !

  • rate this

    Comment number 406.

    Just further evidence that interest is a hidden form of slavery.There are broadly 3 sectors to which a bank can can provide credit in order to pay you interest Gov,business or individuals.Gov will tax you to pay its debt,a business will charge its customers,& an individual will have wage demands which their employer will pass on to customers.The cost of living pays the interest most are net losers

  • rate this

    Comment number 405.

    Do you actually inject your right wing tabloid diatribe on here in the forlorn hope that 1000's of unsuspecting floating voters will actually stumble upon your gross pontifications and succumb to a Tory/UKIP epiphany ?
    Just wondering, as this seems to be your raison d'etre on just about any subject that gets put on here for discussion.

  • rate this

    Comment number 404.

    For a long time our economy has been based on house prices it has been a case of passing the buck to the next generation instead of paying tax and have the government spend money on Roads sea defenses and social housing we have been giving it to the bankers in interest rates their is a lot of people property rich and cash poor

  • Comment number 403.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 402.

    If you are buying an old house remember, the cost of building it is already long since paid off.
    The current seller is just hoping you will take on their debt and give them some extra profit.
    So haggle.

  • rate this

    Comment number 401.

    384.never walk alone
    373. sorrysorryandsorry
    Well given the amount of people here....who want something for nothing! I suggest you start buying abroad for your pension plan.

    == thanks, I did exactly as you suggested, I invested all my savings in far east for properties, even can't believe myself now they are worth 5 times more than I invested since 2005 when I bought the first one

  • rate this

    Comment number 400.

    that's because despite the bankers obscene wages they never contribute to the uk most don't even pay taxes but offset and off shore just like daves dad did!
    The sooner these shysters are gone the quicker Britain will be able to start to become fair to all not just dave and his banker mates

  • rate this

    Comment number 399.

    So the Government says "There won't be any house price bubbles because the BoE will step in" and the BoE then say "Nothing we can do, Guv".

    You couldn't make it up....

  • rate this

    Comment number 398.

    378. Excuse Me Please 'In my mind there is no doubt that unless more affordable houses are built & built quickly social unrest may ensue.'

    oh Really where you going to build them and is this not going to compound the problem of flooding? The way things are going and the artic gets any warmer we might all get flooded as Sea Levels rise! Live with Parents and Family is a sensible future option!

  • rate this

    Comment number 397.

    @388 I have a life insurance policy that covers my mortgage. If I die before my mortgage finishes my 2 nephews will own their own home. My house is rented out because i don't live in it and it pays the mortgage. I don't care how much it is worth now as I am not going to sell it. People on here must realise that not all private landlords are trying to earn money from their tenants!!!

  • rate this

    Comment number 396.

    most of my clients have realized that the only way they can get the 30 plus year old children to move out is to give them a large deposit. Pretty sad when it comes to that.Lucky my clients are moderately wealthy. if they were not so well off they would either be stuck with their kids until they die or they would have to reign in retirement plans. something needs doing as wealth depletes once split

  • rate this

    Comment number 395.

    Carney gave the impression that interest rates would be reviewed when unemployment/inflation hit 7% and 2%. They pretty much have, but now Carney is wriggling saying that they probably won't be reviewing them. He has moved the goalposts and those of us with savings get nothing. meanwhile people are encouraged to go into debt to fuel the economy. Carney cannot be trusted!

  • rate this

    Comment number 394.

    Shelter prices is one aspect of an era that will be looked back on with shame and disbelief.

    The ' PM ' really is a failed PR bloke.

    Sandbagging for 3 hours in a desperate attempt at a photo op.

    Incredibly, a group of bankers is created as a ' protest party '.

    Look at Iceland. Look at how Grillo is succeeding in Italy.

    BBC not reporting it ?

    Kel surprise Rodney.

    We will win.

  • rate this

    Comment number 393.

    They have to keep talking up housing, they need to encourage constantly expanding debt, or the whole scam falls apart. Your house is only an asset if it's paid for, in full. If you owe debt on your house, it's just another liability to you, and an asset to the lender.

  • rate this

    Comment number 392.

    Occupy London should return to picket the Stock Exchange with a lot more camping, and empty luxury properties all over London should be occupied by the homeless as homes to live in?

    That would shake up property market no end & just in time for the General Election. Get Cameron and the Bullingdon Boys in a panic. The unearned profits of the Tory cronies on the plummet, everything going squiffy!!

  • rate this

    Comment number 391.

    you do get the feeling that the leftist on here are in full froth hate / envy mode ! Hate the economy growing house prices rising. benefits being cut and the idle put to work ! they are starting to sound like SNP The U.K. say no pound ! Barroso says no E.U. no Euro ! UN say no membership and NATO will boot them out ! but no they scream its all the English Bullies ! I do despair ! house price apart

  • rate this

    Comment number 390.

    Why are people celebrating a rise in house prices. There is a generation of young people who will not be able to afford to buy or rent their own homes and the number will increase as more properties become too expensive. Meanwhile, new homes are being bought by people who have too many homes and only live in some for a few days a year. Obviously, they are more important than the homeless.

  • rate this

    Comment number 389.

    353.Alasdair Campbell
    "Any recovery based on the housing market is an illusion, focussed at it is on borrowed money.... Or am I missing something."

    Yes, quite lot ... including the fundamental difference between leading and lagging performance indicators.


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