5 starkest warnings about the housing market from top public figures

The Bank of England deputy governor Sir John Cunliffe today said the housing market poses the biggest risk to the UK economy.

He said the biggest problem was that house prices were rising so much faster than people’s incomes.

But this isn’t the first time we’ve heard that. In fact, these are the times we’ve heard the warning from five high profile figures/bodies just in the last two months:

IMF

Last month, the IMF said the housing market posed a threat to Britain’s economic recovery. IMF director Christine Lagarde called for “targeted and timely” measures to clamp down on high loan-to-income ratio mortgages.

Banks

In a June BoE survey, 40% of UK banks, building societies and asset managers said house price growth could lead to a crash, posing a “key risk” to the economy. This was up from 36% in November and 14% in the second half of 2012.

Mark Carney, BoE governor

In May, the BoE governor was asked what the biggest threat to the UK’s economy was. “The biggest risk to financial stability, and therefore to the durability of the expansion – those risks centre in the housing market, and that’s why we are focused on that,” he said.

Vince Cable, business secretary

Also in May, the business secretary warned booming house prices were destabilising the economy. He said the relationship between debt and income in the UK posed “a real, real, real worry” to householders and policymakers.

Ben Broadbent, incoming BoE deputy governor

Again last month, Ben Broadbent, the incoming BoE deputy governor issued this written warning to the Treasury Select Committee: “What I worry about is if the recovery in the housing market, which, in some areas is very strong, encourages an increase in mortgages, and in particular high loan-to-value, high loan-to-income mortgages, i.e: risky, mortgages that is what really matters to financial stability.”

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