LONDON, June 6 Britain must be alert to rising
house prices and indebtedness, finance minister George Osborne
said on Friday, hours before the release of an International
Monetary Fund report that is likely to raise concerns about
British house prices are rising at their fastest rate since
the eve of the financial crisis, and in April Osborne said it
was necessary to keep a close eye on the market.
Bank of England Governor Mark Carney has since called the
housing market the greatest domestic risk at present to
Britain's financial stability.
IMF managing director Christine Lagarde will present the
Fund's annual assessment of Britain's economy later on Friday,
and in a BBC radio interview, Osborne said she too was looking
closely at Britain's property market.
"I agree with Christine Lagarde that we need to be alert to
the build-up of debt in the housing market. We need to be alert
when we see house prices rising," Osborne said.
"I have given the Bank of England tools to do the job, and
they should not hesitate to use those tools if they see these
developments turning into a risk to the British economy."
The BoE's Financial Policy Committee will publish its
half-yearly stability report later this month. It may take
further steps to require lenders to set aside more capital
against certain types of home loans, and to assess borrowers'
ability to repay mortgages more stringently.
(Reporting by David Milliken; Editing by Catherine Evans)