Mark Carney, the Bank of England governor, has delivered a warning to home owners about the risks of rising interest rates as Threadneedle Street made clear it was keeping a close eye on developments in the housing market.
Carney said that people should check to see if they could still afford their repayments on their home loans, when he said, "rates rise, as they will, when the recovery takes hold".
Speaking on ITV News Anglia, he reinforced the message from another senior bank official, Paul Fisher, saying both borrowers and lenders should be careful not to overstretch themselves.
Fisher, Threadneedle Street's executive director of markets, rejected the idea that a property bubble was emerging but stressed that the bank was alert to the risks of another boom-bust.
His comments came as latest construction figures revealed a strong increase in private house building, offering a counterpoint to mounting fears that the ground was being laid for a new housing crash.
Fisher said the market was clearly gathering momentum after years in the doldrums and prices had again started to hit the headlines.
"I must say that don't see any evidence of bubble behaviour as yet, with mortgage lending still subdued relative to what is likely to be normal levels of activity. The housing market is recovering from a number of years of very low transactions, with house prices having risen well below the inflation rate."
Recent house price surveys have shown that the cost of property is increasing by about 5% for the UK as a whole and by 10% in London.
The bank said this week that the number of home loans approved by lenders in August was the highest since February 2008.
Fisher said: "It is not surprising if we see an adjustment of relative prices when the market recovers, and of course London has special demand pressures which are not present elsewhere in the UK, especially for high-end housing.
"But we may well see a response in new housing supply in due course, limiting the effects of demand on house prices."
Fisher's comments on housing supply were boosted by construction figures also released on Wednesday which showed the strongest growth in private house building since 2003.
A CIPS/Markit survey showed that Britain's construction industry grew for the fifth successive month in September.
Private house building has grown strongly over the last year in response to the government's Help to Buy deposit guarantee for new homes.
The Bank of England's Funding for Lending scheme, which has cut mortgage rates, is also credited with increasing the supply of cheap credit to buy homes.
Tim Moore, senior economist at Markit, said: "Construction is no longer the weakest link in the UK economy. The third quarter of 2013 ended with output growth riding high amid greater spending on infrastructure projects and resurgent house-building activity. The reversal in fortunes has spanned commercial, residential and public-sector construction projects."
The Markit/CIPS UK construction purchasing managers' index (PMI) came in at 58.9 for September, down from a near six-year high of 59.1 during August. A figure above 50 indicates expansion.
Undaunted by warnings from within his own government of a potential asset bubble, David Cameron announced this week that the government had brought forward the second phase of its Help to Buy scheme for mortgages, from early 2014 to this month.
He said: "Let me assure you that the bank will not be complacent about allowing financial stability risks to build through an over-expansion of the housing market. Both borrowers and lenders need to be careful not to overstretch themselves.
"In line with the recent financial policy committee statement, we will be keeping a very close eye on developments, and the bank has a range of tools that can be used in mitigation of those risks."
Howard Archer, UK economist at IHS Global Insight, said the construction sector was exhibiting "marked sustainable improvement following extended, deep weakness".
Archer said: "Indeed, the construction sector highly likely saw even stronger expansion in the third quarter than in the second quarter when output grew 1.9% quarter-on-quarter.
"The construction PMI averaged 58.3 in the third, which was up substantially from 50.4 in the second quarter and was the best quarterly performance since the third quarter of 2007.
"This fuels belief that GDP growth in the third quarter could very well have accelerated to close to 1%."
However, output across the construction industry remains well below its peak and analysts estimate that 100,000- 150,000 construction workers are either working in other sectors or without jobs.
According to the Office for National Statistics the construction industry is operating 14% below its pre-crash level.
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