Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. Registration is free and only takes a minute.

Andrew Bailey: BoE will intervene to prevent a property bubble

Andrew Bailey: BoE will intervene to prevent a property bubble

Deputy governor Andrew Bailey says the Bank of England is closely monitoring the housing market for signs of a bubble and will intervene if necessary.

In an interview with the Sunday Telegraph, Bailey said the Prudential Regulatory Authority (PRA), which he heads, could intervene to and order banks to hold larger cash reserves or reduce the loan-to-value ratios offered.

‘We are watching the housing market very carefully,’ he said. ‘We’ve laid out the tools that we can use. We have set out our desire to see robust mortgage underwriting standards [and that] will be part of our approach.

‘The thing I stress is that we will use those tools.’

Although Bailey (pictured) said that he does not believe that the UK housing market is in bubble territory yet, monitoring it will be a priority next year. Bailey’s warning comes as business secretary Vince Cable called for a review of the government’s flagship Help to Buy scheme, which he said is fuelling a ‘raging housing boom’ in London.

Last week, the Royal Institute of Chartered Surveyors predicted that house prices will rise by a further 8% in 2014, while the Council of Mortgage Lenders said gross lending will reach £170 billion in 2013, ahead of its expectation of £156 billion. However, this remains some way off the £363 billion advanced in 2007 at the peak of the house price market.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Investment Pulse: the highs and lows of 2014

Investment Pulse: the highs and lows of 2014

This week's Investment Pulse looks back at some of the biggest stories of the year as well as looking forward to 2015.

Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter