Bank of England Deputy Governor Charlie Bean said he isn't worried the U.K. housing market is poised to suffer a new bubble. "We wouldn't want to see a house price boom emerging which would have potential problems further down the road," Bean said in an interview with Bloomberg News published yesterday. "I can't say we see signs of that at the moment. At this stage, you certainly wouldn't say there's a problem." With housing having struggled during Britain's recession, signs are mounting that a recovery in the property sector is now underway, partly because of government measures to boost demand. A home-value gauge compiled by the Royal Institution of Chartered Surveyors rose to the highest in almost seven years in July. Speaking during a Federal Reserve Bank of Kansas City conference in Jackson Hole, Wyoming, Bean said the central bank would like to see an increase in housing transactions and that home prices were for the moment increasing in line with general inflation. "I don't think that we'd want to see a situation where house prices are running ahead at an unsustainably rapid rate," he said. "Clearly it's one of the things to look at as all the activity indicators pick up -- are there any signs of excesses starting to emerge?" Climbing house prices are spurring consumer confidence and growth in a country where two thirds of homes are owned rather than rented. Halifax, the mortgage unit of Lloyds Banking Group Plc, estimates values rose for a sixth month in July and will continue to increase through the end of the year. Mortgage lending climbed 29 percent from a year earlier to the highest level since the collapse of Lehman Brothers Holdings Inc. in 2008, according to the Council of Mortgage Lenders. As the economy shows signs of recovering, Bean said the BOE is seeking to send a "clear signal" it won't increase interest rates anytime soon as he acknowledged some surprise at the response of investors to that message. Source : bloomberg
