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Mark Carney must cool off an overheating housing market

 

James Moore
Wednesday 21 May 2014 03:12 EDT
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Outlook Property is once again the hot investment commodity, as results from the buy-to-let lender Paragon clearly demonstrated. First-half profits grew by a fifth and the chief executive reckons lending could more than double in the second half. Clients borrowed £269.3m in the first six months of the company's year, and with a pipeline of £348m, it would be a surprise if his prediction doesn't prove accurate.

Which brings us to yesterday's increase in inflation to 1.8 per cent. That was probably down to factors such as a late Easter, and it still remains below the Bank of England's 2 per cent target. So there doesn't appear to be any real threat of an interest rate rise any time soon, despite what some commentators would have you believe.

Nonetheless, the Bank's Governor, Mark Carney, is right to be worried. With house prices rising at 8 per cent, the bubble continues to expand apace. He needs to find a way of deflating it gently before it pops.

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