Sorry, the Bank of England can't do anything about the housing bubble

Would you believe it – the Bank of England says it has ‘no power’ over the massive property bubble at the higher end of the housing market, bringing a return to outrageous prices in London.


Speaking on the Andrew Marr show, Mark Carney, the guv’nor, played down the idea that there actually WAS any bubble, and mumbled something positive about recovery and the Help to Buy scheme.

Carney explained that as massively rich people were buying properties in London with cash, there was little it could do but ‘watch’ as prices soared.

‘It's driven in many cases by foreign buyers’ he said. ‘We as the central bank can't influence that. We change underwriting standards - it doesn't matter, there's not a mortgage. We change interest rates - it doesn't matter, there's not a mortgage, etc. But we watch and we watch the knock-on effect.’

This comes as the most expensive property in London went on the market last week in Mayfair, a 21 bedroom mansion priced at £90m.

So soon we’ll all be living in ditches, priced out of the market, while the oligarchs fiddle around in their home cinemas and underground swimming pools. But you know, everyone’s hands are tied – sorry!

Still, while all that lovely foreign money rolls right in, the Tories would be delighted to give all you ‘hardworking families’ a 95% mortgage on a terraced hovel in Rotherham. Will that do?


  • james d.
    He's not saying no-one can do anything about it he is saying he can't do anything about it. He actually can't do much, More QE, less QE, More bonds less bonds, higher interest rates lower interest rates. That's about it. In fact the only thing he could do to deter foreign purchases is inflate the value of the £
  • Chris
    They could put up interest rates so that the £ becomes more expensive in other currencies and other forms of investment are more attractive than houses. Not likely though.
  • klingelton
    simple economics. Demand and supply. Rich foreign investors demand large expensive houses in that London. The supply is limited, so the price of the house rises to offset this. This has nothing to do with the help-to-buy scheme, which is artificially raising the price of first time buyer properties, and thus pushing the price of these houses up and onward up the chain is what's causing the housing bubble. It will get the housing market moving again - but at the cost of when the scheme ends, the rug will be pulled out from underneath the housing market and the whole thing will stagnate again, possibly causing another recession. What actually needs to happen, is for the housing prices to return back to a level where they are not 8 times the salary of an average person. Then people will be able to afford houses again, and the market will start moving, albeit at a much reduced level. More likely, previously owned by the state property and sold of in a right to buy scheme in the 1980's and 1990's housing will be bought up in vast tracks by unscrupulous private landlords who will most probably plunge families into house share schemes akin to 1880's Britain. City centres will becomes slums once more and people are herded like cattle into alms houses to earn their pittance to pay their rent and spend every Friday sloshed on ever weakening ale. Please sir, can I have some more?
  • adr0ck
    this is easy to solve just do what most other countries do restrict non citizens from buying existing properties in oz for example if you dont have australian citizenship you are restricted to buy new properties (as this creates jobs)

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