Governor of the Bank of England (BOE) Mark Carney has warned homebuyers in Britain of the dangers of rising interest rates Thursday.
The warning came just before new figures from a leading local building society which showed house prices were now rising at their fastest rate in over three years.
Carney, who became governor of the central bank in August, faces the challenge of nurturing the UK's emergent recovery in the face of external problems in the Eurozone and a global slowdown and internal challenges posed by reduced investment rates and poor productivity.
In a bid to boost investment, David Cameron's coalition government has introduced a scheme to help homebuyers with their mortgages, and has sought to stimulate business investment with the Funding for Lending Scheme.
However, figures released Thursday by Halifax Building Society showed that house prices had risen 6.2 percent in the year from last September, and by 0.3 percent month on month.
Carney said in an interview with a British regional TV company, that homeowners should keep an eye on how they can manage their budgets and mortgage payments "when rates rise -- as they will when the recovery takes hold."
Carney added, "The bigger challenge is how do we ensure housing grows in a sustainable way."
The BOE has warned that it could intervene if there was a danger of a housing bubble developing which could damage the economic recovery.
Limited supply is pushing up house prices in the southeast of England and in London, where investment from abroad is also playing a part in rising house prices.
Prices in these areas have recovered the losses made since the onset of the financial crisis in 2008, while prices in the rest of Britain remain 6.6 percent below that level.