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Posted: 07.03.14

Housing market in recovery, but London still sets the pace

Housing market in recovery, but London still sets the pace

The UK housing market is in recovery, according to the head of the Bank of England, fuelling hopes that developers and building specifiers will see continuing growth.

Governor Mark Carney reports that, with prices picking up in all areas of the UK bar Northern Ireland, the recovery is a “generalised phenomenon."

However, in the case of London – where prices are rising at 10% a year, far above the national average – the bank could do little to stem the rapid advance because many properties are bought outright and are therefore unaffected by changes in interest rates.

Carney confirmed that, while the Bank of England is on the look-out for the wider effects of the London price boom, he believes that, outside London, the housing market still has not fully recovered from the 2008 banking crisis.

“What we’ve seen in the housing market is an adjustment from very low levels,” he explains, confirming that house purchases and mortgages are “still more than 25 per cent below historic averages.”

Carney also explained that the Bank of England is using additional powers to avoid the risk of boom-and-bust in the housing market.  “We’ve tightened up on underwriting standards, we’ve tightened up on capital standards, we’ve taken away special stimulus programmes that existed before.”