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London - The Bank of England will act soon to restrain Britain's booming housing market but prices are still set to rise nearly 8% this year as a dearth of supply and a government loan programme fuels inflation, a poll has found.
That is not far off the 11% average pace seen in the year to April, which prompted BoE deputy governor Jon Cunliffe to say earlier this month that it would be "dangerous" to ignore the rapid rise in house prices.
A vast majority of around 30 property analysts polled in the past week said the British central bank's new financial policy committee would for the first time use some of the sweeping powers it was granted a year ago to curb market excesses.
BoE governor Mark Carney and the monetary policy committee have been reluctant to raise benchmark interest rates from their current record low of 0.5% in case it chokes off a vigorous economic recovery.
Mortgages
Carney will face the challenge on Wednesday of explaining why the bank is signalling it is in no rush to lift borrowing costs even as growth picks up speed and house prices soar.
Instead, the FPC may force banks to hold more capital against certain types of mortgages, or urge caps on how large mortgages can be compared to a borrower's income.
"Financial, rather than monetary policy will be tightened first in an effort to slow down the UK housing market," said Phil Lachowycz at Fathom Financial Consulting. He still predicts a 17% rise this year - the highest in the survey.
A majority of those who expected the FPC would try to cool the market said it would do so when it next meets in June, as also predicted by a recent poll of economists.
