Chancellor: BoE has responsibility to cool housing market
George Osborne has suggested he will not intervene in order to prevent a bubble emerging in the UK's housing market.He said the Bank of England (BoE) has the responsibility to act and should not hesitate to do so if it believes economic stability is being threatened.The chancellor said the correct response to the housing shortage is to build more homes to enable families to get onto the property ladder but the BoE could take action if necessary.Speaking on BBC Radio 4's Today programme, Mr Osborne said: "Mark Carney and the financial policy committee are very qualified people to make this judgment and my job as the chancellor, the job of parliament, is to give the BoE the tools to do the job. Let them make the assessment.""Let's not repeat the mistakes of the past, let's make sure we have learnt those lessons," Mr Osborne added.House prices have risen by 8.5 per cent in the year to April, reaching an average of £177,648, and sales are now at their highest level for six years.Concerns have been raised by three former chancellors - Lord Lawson, Lord Lamont and Alistair Darling - that the government's Help to Buy initiative, which provides support for house purchases of up to £600,000, could be creating problems in the market.Last week, the Organisation for Economic Cooperation and Development called for action to be taken to prevent the housing market from overheating.It made a number of suggestions to achieve this, such as introducing higher capital requirements for lenders and maximum loan-to-value ratios for mortgages.Although the BoE has so far been reluctant to intervene, deputy director for financial stability Sir Jon Cunliffe recently gave the strongest sign yet that it could take action.He said whether to make an intervention, and in what manner it should do so, would be the most challenging decisions the BoE's financial policy committee will make in the near future.
--- Ends ---