Frankly, talk of a housing boom at the moment is premature. There is an orderly market with reasonable liquidity and if asking prices are sensible properties will sell. If asking prices are too over zealous they will not sell.
This is the determining factor when trying to understand a housing boom where, historically, supply of properties is so constrained and demand so insatiable that properties sell almost regardless of price where there is a classic sellers market and many bidders vying for the same property.
Outside of London, yes, you have all the signs of a revival of the property market whereas 18 months ago there was little activity but it is a long way from a boom.
I think it is a good thing that Mr Carney’s focal point includes other factors than just inflation. There is no question that with the uncertainty in the Middle East fuel prices will rise and this will affect food prices, so, there is inflation being stoked up for the next quarter in this respect. But supply generally for consumer goods is plentiful (aided and abetted by opportunistic internet browsing). Although there is inflation, in China, a halt has been called to ever reducing consumer prices but there are other parts of the world that manufacturers are using instead i.e. Mexico, Brazil etc.
The paradox is that although inflation erodes living standards at the same time mortgages shrink in relation to asset values and from the doldrums of the last 2-3 years a little bit of positive inflation in the system wasn’t a bad thing.
I do believe that the Governor of the Bank of England is boxing himself into a corner by making needless predictions about interest rates over the next three years since there is so much that could intervene that would render this unreliable and prone to reappraisal. A few reappraisals too many could generate a whiff of incompetence – that is never good for the captain of the money ship!