Carney warns over housing market threat to economy

Mark Carney, the governor of the Bank of England, has warned that house prices represent the biggest risk to the UK economy.

Speaking to Sky News he said the UK housing market was plagued by structural issues.

He said: ‘The longer-term structural issue is that there are not sufficient number of houses built in the UK. We are not going to build a single house at the Bank of England, but what we can influence is whether the banks are strong enough, i.e. do they have enough capital against risk in the housing market, and whether underwriting standards are tough enough.’

‘By reinforcing both of those we can reduce a risk that comes from a housing market that has deep, deep structural problems.’

In a similar vein, deputy prime minister and Liberal Democratic leader Nick Clegg said on BBC One’s Andrew Marr show that the government could scale back the government’s Help to Buy scheme if needs be.