Carney warning gives house builders the jitters

Aaron Morby 11 years ago
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House building bosses have warned that the industry needs stability to deal with the housing shortage after Bank of England governor Mark Carney gave the starkest warning yet he is looking at measures to head off a property price bubble.

In a forthright warning Carney took a swipe at house builders claiming the housing market posed the biggest single risk to Britain’s economic recovery as a shortage of new homes drives up prices.

He said that the Bank had no solution for building levels but could act to dampen demand with a series of fresh measures.

In a television interview, he said: “We could limit amounts of certain types of mortgages that banks could undertake, we could provide advice – the Chancellor has asked us if we would provide advice on changing the terms of Help to Buy. All those things are possibilities and we will consider them all.”

His words have given volume house builders, which have been criticised for not building homes more quickly, the jitters.

Home Builders Federation Executive Chairman Stewart Baseley,said: “We have an acute shortage of housing that has developed over decades and is going to take time to address.

“After years of the lowest rate on record, house building is now increasing very rapidly.

“First quarter private starts up a remarkable 44% year on year, with year to march private starts up 34%. To maintain and sustain these increases house builders need stability.”

Baseley added: “The Help to Buy Equity Loan scheme has supported demand for new build homes and its extension provides certainty about longer-term demand.

“This is allowing the industry to plan ahead, rebuild capacity lost in the downturn and deliver. This is providing desperately needed homes and also creating jobs on sites across the country and in the supply chain.

“While the number of Equity Loan scheme sales is very small in terms of the overall housing market, it is driving up new housing supply.”

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