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 868.

    AfA @858
    "the platform
    equal partnership"

    If truly so, and the logic for democracy is irrefutable, then all here who protest but wish only 'a better chance', a somewhat less-rigged lottery, are fooling themselves and failing the future, collectively as much to blame as chiefest Quislings of Mammon

  • rate this

    Comment number 867.

    Waiting for interest rates to rise will be like waiting for West Ham, QPR or Charlton Athletic to get into the Champions League.

  • rate this

    Comment number 866.

    Years of low interest rates.
    Millions with large mortgages.
    Interest rates increase, mortgages no longer affordable.
    Millions stop spending, country back in recession.
    Simple solution, interest rates will remain very low.
    Anyone for monkey tennis?

  • rate this

    Comment number 865.

    I have a foreign landlord. He gets £8000 a year rental on the flat he paid under £100,000 for. But he is not satisfied and is trying to increase my rent. When I ask for essential redecoration (i.e paint peeling off) I am told to do it myself! So I referred this to a rent tribunal. The result is that he is evicting me. My own government will not protect me against the greed of foreign investors.

  • rate this

    Comment number 864.

    Yes it is recovering, but it seems the reason is interest rates pegged artificially low coupled with severe housing shortage. The former will surely rise at some point leading to a mass of repos and a repeat of 2008.

  • rate this

    Comment number 863.

    856. Dave1506

    How does he get his HMO licenses so quickly.

    He did not start with 100 houses. I can understand how it might work at that level I was just wondering how he did it in the early days. I have known people build up a number of houses quite quickly but it usually involved hooky mortgage valuations.

  • rate this

    Comment number 862.

    854. East London was built for people with little money. Learn the accent and you should have little trouble. But stay far away from Stamford Bridge. It will be far too much of a financial and cultural shock to you.

  • rate this

    Comment number 861.

    He has changed his "forward guidance" to a blank cheque (see the vacuous interview with the BofE Chief Economist on Today at the end of last week), when, totally unexpectedly, his expectations came to nothing. He calls inflationary rises in the price of housing a recovery, and he says he can do nothing about it, which will accelerate the trend exponentially. This man is out of his depth.

  • rate this

    Comment number 860.

    "The (house) prices relative to incomes have come down relative to historic levels". Er, HELLO Mr Carney. Historic levels are house prices at 3.5 times average income. Average house price in London is about £500,000. So most of us earn about £140,000 do we??!! Get real! It's more like £25,000. Tulip mania!!!

  • rate this

    Comment number 859.

    How can one build a successful economy by relying on house prices? Has nothing been learned from the previous crash?

    However much our houses increase in value they are worth nothing to us unless we sell them and realise the cash.

    What do we do then - live in a mud hut?

  • rate this

    Comment number 858.

    "What sort of a ridiculous world?"
    IF we want a world as fair as can be, all free to follow conscience & to compete in vocation, able not least to follow what appears good advice & honest leadership as rationally to trusted, with no corrupting conflict of material interest, we should not wait for its emergence by accident. We have to understand & agree the platform: equal partnership.

  • rate this

    Comment number 857.

    I'll give it ten- twenty years and I I think that most house prices will be so that most young families will soon been living in eco Yurts in hills above the Flood Plains...(if they have any sense that is and WWIII hasn.t started )
    but then I always was a cynic and a pantheist

  • rate this

    Comment number 856.

    Well here we have an upstanding student landlord with 100+ properties with 5 people per house his income enables him to buy a new property each month for cash, he offered this to a friend but asked him to wait 2 weeks as his next rent payment wasn't due 'til then.
    That is the way its done it does help there are two unis in town with insufficient accommodation.

  • rate this

    Comment number 855.

    It was not just the bankers. It was greed..

    Those who took £2000 to destroy equitable building societies added to the frenzy of greed that led to the crash.

    It was high house prices.. That was the problem and still is the problem.

    High house prices is not the solution it is the problem.

    We are heading for another crash...

    Release building land and the average new house price will be £75,000

  • rate this

    Comment number 854.

    Yoda you arrogant muppet I don't envy anyone who spends 6 nights a year in their kensington mansion with giant basement etc, whose groceries are delivered by fortnum and mason. If I had as billion quid nothing about those peoples lifestyle would appeal to me, but a young professional working 50 hour weeks in the capital should be able to move on from student digs and afford a reasonable lifestyle

  • rate this

    Comment number 853.

    @840...& your destination of choice is?

    UK is not perfect by any means, but when you move to shangri-la & have to pay for emergency health care & find the cost of living is higher than here don't start moaning.
    Aside from the obvious (crap weather) you will find unless you are loaded the rest of the world sucks just the same. Anywhere can be nice if you have money, you apparently don't, oh dear.

  • rate this

    Comment number 852.

    There appears to be a clear dividing line with these posts. There is a minority of smug g*** who each seem to own half a town gloating about their capital gains and rocketing rents.

    Then there is everybody else. How do some of these owners acquire so many houses so quickly- one boasted of 29

    I fully accept there needs to be a private rented sector but why do all Landlords seem so greedy.

  • rate this

    Comment number 851.

    Another boom and bust in the way fuelled by the governments help to buy scheme which require 5% deposits, the exact thing that caused the last disaster!

  • rate this

    Comment number 850.

    Communists used to say "All property is theft". It seems the New Labour BBC educated socialist of the UK thinks "Everything that I can't afford is theft". The politics of envy will get you nowhere.

  • rate this

    Comment number 849.

    "If the houses / apartments are bought by cash ...if its from abroad were they legitimately earned?"

    A very good question. I am currently buying a house for cash for me to live in. Anti laundering rules meant I had to provide 10 years worth of bank records to prove the money was legit. I wonder how thorough the process is when it comes to someone from abroad?????


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