UK housing market is on fire, warns Bank of England chief economist

Continued rise stoked by tax breaks and demand from well-off households likely to deepen inequality, says Andy Haldane

Britain's housing market is on fire" thanks to the extension of government tax breaks for homebuyers and increased demand from richer households with more savings following coronavirus lockdowns, the Bank of England's chief economist said on Tuesday.

Andy Haldane warned that the property market was likely to continue running hot while all these factors, in combination with the central bank's ultra-low interest rates, remained in place. He said the recent rise in house prices - which topped 10% over the 12 months to March 2021, according to official data - was very likely to worsen inequality.