Although Mark Carney took a while to understand the mechanics of the British economy, I think he is certainly starting to understand the dynamics of the property market. The London residential market is growing by circa 8% but in outer regions of the UK it is far less.
Help-To-Buy has had a substantial political effect but due to its limited scope it has not, in itself, been responsible for ‘stoking up’ a housing bubble at the lower end of the market and, therefore, it should not be prematurely withdrawn in line with certain bellicose comments against it. It is an excellent initiative and should continue unabated for a while longer at least.
Plans to make mortgage applications more arduous have to be looked at very carefully. This will certainly slow transactions down and will disadvantage the less privileged buyer who needs a much larger deposit and therefore favouring the wealthier buyer who needs a smaller deposit.
Lenders are taking a reasonable amount of time to process applications in any event, without any change in strategy. The risk for this is, that if transactions take longer and are more difficult, you could exacerbate the increase in prices as the demand increases with a finite supply of properties.
Mr. Carney seems to have absorbed all the information available to him in a reasonable and rational fashion, without the need to be trigger happy with interest rates rises.
Everyone understands that an interest rate rise is going to happen in the next year or so but the longer that he can leave it the more that the recovery has a chance to become imbedded with all its attractions.
The savers will welcome any greater returns and since we are a net importing nation the strength of the pound will keep down inflation for a little longer.
You should be buying Dollars (or Euros for that matter) with Sterling and using them for your next holiday in Florida/France!
We shouldn’t criticise the buoyancy of the housing market since the recovery is consumer led and unless consumers feel confident, they will not spend.