International concerns over UK property price increases

By Natasha Adamson

An international think tank has said that the Bank of England needs to act quickly to prevent a housing bubble in the UK.

The Organisation for Economic Co-operation and Development (OECD) raised concerns about the pace at which property prices are increasing in the UK, and says some house buyers are taking on unsustainable levels of debt. The OECD recommends an increase in interest rates and says property buyers should be required to put down larger deposits.

However, the comments from OECD have been criticised for failing to look beyond the surface of property statistics for the UK, which are largely inflated by the explosive housing market in London and the surrounding area. The large majority of home owners in Northern Ireland and the rest of the UK are understandably bemused when they hear rhetoric about an impending property boom - many still have a negative equity problem, and in a lot of areas of the UK property prices have only recently stabilised and are now showing very modest increases.

Mortgage borrowers and would-be purchasers in the rest of the UK have expressed concern that they could potentially be punished as a result of efforts to reign in the London property market with an interest rates rise or a further tightening of mortgage lending rules.

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