MetaTrader 4
Vertex FX 10

UK House Price Rises “not a threat”

Mark Carney the Governor of the Bank of England spoke before the Treasury committee on Wednesday. He stated that he wasn’t concerned by the house price rises in the UK and expects the housing market to cool by 2016. The housing market, primarily in the South East, has seen considerable gains with fears of a bubble in pricing emerging. The record low interest rates (0.50%) combined with minimal new supply and increasing demand, has fuelled double digit percent rises per year in some regions. The disparity between wage growth and house price increases has widened considerably over the last few years, with affordability of housing becoming a major political issue.

In perhaps a subtle remark that now would be a good time for home owners to fix their mortgage rate, Carney is reminding the market that interest rates will be going up.

The Council of Mortgage Lenders (CML) released figures for November showing that first-time buyer lending was up 24%  compared to November 2012. The government flagship housing policy for FTB’s has been criticised for adding to a bubbly market.

The timing of the Bank of England rate rise will be an important driver for GBP in the FX markets. 


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