Speaking at a Barclays conference in New York, the bank’s chief executive Antony Jenkins said Britain runs the risk of a property boom as the economy starts to recover.
‘We are seeing probably a more buoyant housing market for the first time in perhaps as much as a decade,’ Jenkins said, according to Bloomberg. ‘That’s a bit concerning because there is the risk of a property-driven boom in the UK. The regulators are on it and don’t intend to let it happen, but these things can be difficult to control.’
Britain’s wider economic recovery has also improved consumer confidence in the UK housing market. House prices surged to the highest in almost seven years in August, the Royal Institution of Chartered Surveyors said yesterday.
Also adding weight to the recovery of Britain’s property industry is the performance of housebuilder Barratt, which unveiled a 74 per cent rise in pre-tax profits to £192.3m in the year to June. The company cited improving confidence and better lending conditions as a result of initiatives such as the Bank of England’s Funding for Lending scheme, which aims to increase mortgage lending to households.
Echoing Jenkins’ comments, business secretary Vince Cable warned that a ‘new housing bubble’ could be around the corner due to the upturn in lending. The government has made it easier for buyers with only a 5 per cent deposit to buy a new-build property worth up to £600,000, and the scheme will be extended to any home in January 2014.