Back in April voters tended to think house prices would keep on rising, now they tend to think that sooner or later they will crash
During May the governor of the Bank of England, Mark Carney, warned that the housing market poses the biggest threat to Britain’s economic recovery. He said homebuilding was half that in his own country, Canada, despite the UK having twice the population. And with figures showing the annual rise in house prices at its fastest increase in seven years – in London, 4.2% in April alone – the Nationwide building society later said the London market could face a “natural correction”.
A new YouGov survey finds that formerly stable opinion towards the housing market has now shifted.
While in April 45% thought house prices would keep on rising and 38% thought they would crash sooner or later, now 47% think house prices are unsustainable and 38% think prices will go on increasing.
Outside of London house prices remain below their pre-crisis peak; however London is the only British region whose public still tend to think that prices will keep on increasing (by 47-42%).
The worry for the Bank of England is that once the economy recovers enough to raise interest rates – still at a record low of 0.5% – rising mortgage repayments could create financial difficulties for mortgage holders. But Mr Carney only has limited powers - he reminded people that “we're not going to build a single house at the Bank of England and we can't influence that”.