(Repeats story for wider distribution)
LONDON May 17 The British housing market has
"deep, deep" structural problems which pose the biggest current
risk to the economy, Bank of England Governor Mark Carney has
said in an interview.
"The issue around the housing market in the UK ... is there
are not sufficient (numbers of) houses (being) built," he told
In extracts of the interview released by Sky ahead of its
full broadcast on Sunday, Carney noted that the number of large
mortgages being approved is on the rise and said more houses
needed to built in Britain.
"We're not going to build a single house at the Bank of
England," he said. "We can't influence that.
"What we can influence ... is whether the banks are strong
enough. Do they have enough capital against risk in the housing
Carney said the Bank could also check lending procedures "so
people can get mortgages if they can afford them but they won't
if they can't."
"By reinforcing both of those, we can reduce the risk that
comes from a housing market that has deep, deep structural
Carney said there was evidence that large mortgages, where
house-buyers are given loans up to four times their salaries,
are on the rise again.
"We don't want to build up another big debt overhang that is
going to hurt individuals and is very much going to slow the
economy in the medium term," he said.
"We'd be concerned if there was a rapid increase in high
loan-to-value mortgages across the banks. We've seen that
creeping up and it's something we're watching closely."
Last week the Bank played down the chances of an imminent
rate rise despite fears of a growing house price bubble.
"The biggest risk to financial stability, and therefore to
the durability of the expansion, centres on the housing market
and that's why we're focused on that," he said.
Earlier this month, the OECD think tank called on the Bank
to impose measures to help slow rising house prices.
(Reporting by Stephen Addison; Editing by Bernard Orr)