"There is a history of things shifting in the U.K. and the housing market moving from stall speed to warp speed. We want to avoid that."
- Mark Carney, BoE Governor
It seems that the 2014 year will bring many reforms and changes to the U.K. housing market. During this year many analysts and U.K. officials have been expressing their concerns over the constantly rising property prices and falling supply, which can lead to a market collapse. However, it is unclear how and when the government will change its policy. The first and the most probable option is to review the controversial Help-to-Buy scheme. Business Secretary Vince Cable stressed out the government will be forced to revise the Help-to-Buy scheme in order to curb the raging property market. He also called for a interest rate hike to stop the booming London and the South-East from running out of control. At the same time, one of the BoE's most senior figures, Andrew Bailey, warned the homebuyers could see a clampdown on house purchases in case there is more evidence that rising prices are spiralling out of control. He said potential buyers will have to go through a series of tests before they are offered a mortgage, while the amount of capital banks have to hold against the lending should be increased as well.
Mark Carney were questioned about the housing market during his speech at the Economic Club of New York. The Governor has to rebalance an entrenched surge in capital, while additional action to cool the market can push him back against government measures aimed at helping households at a time when credit affordability is already stretched.
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