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Boom for British house prices

Friday, September 27, 2013 - 01:50

Sept. 27 - New data shows British house prices jumped significantly in September. But as prices rise, so too are concerns about a government scheme to help buyers onto the property ladder, amid fears of a bubble. Kirsty Basset reports.

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British house prices are on the up. New data shows prices jumping at their fastest annual pace in more than three years in September. But it's not good news for Britons trying to get a foot on the property ladder. Reuters BreakingViews Economics Editor Edward Hadas says high prices, particularly in London, could see the best and brightest lured away to more affordable cities. (SOUNDBITE)(ENGLISH) REUTERS BREAKINGVIEWS ECONOMICS EDITOR EDWARD HADAS SAYING: "What we're seeing is especially youngish people who are willing to rent, it's not a big problem. Prices are exorbitant, they're not unaffordable. It's when you come to buy, if you're not a buyer, the amount of money you need is really, outside of banking, it's really very unusual for people to have that kind of funds." The government is trying to help those struggling to find large mortgage deposits with a 'Help to Buy' scheme. But there are concerns it might create a bubble. Now Finance Minister George Osborne says the Bank of England should intervene, if it looks as though prices are entering bubble territory. Richard Hunter is from Hargreaves Lansdown. (SOUNDBITE)(ENGLISH) HEAD OF UK EQUITIES AT HARGREAVES LANSDOWN, RICHARD HUNTER SAYING: "It's absolutely the right thing to do. I think the Bank of England have got to keep a close eye on it. They're aware of some of the risks they're taking anyway with QE and low interest rates so the last thing they will want, especially in the early parts of Carney's tenure, is for anything like a bubble to be developing." Bank of England Governor Mark Carney says that while housing is seeing a turnaround - levels of activity remain at around two-thirds of longer term averages. Others agree. (SOUNDBITE)(ENGLISH) HEAD OF UK EQUITIES AT HARGREAVES LANSDOWN, RICHARD HUNTER SAYING: "It's a fairly modest and anaemic recovery outside of London." But a recovery nonetheless. And amid other signs of a pickup, the governor also said he sees no need for more QE to boost the economy.