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LONDON, May 29 (Reuters) - It is too early to tightenunderwriting rules for home loans to cool what critics say is ahousing bubble in parts of Britain, the head of Britain'swatchdog the Financial Conduct Authority said on Thursday.
The Bank of England's Financial Policy Committee (FPC) meetsnext month to decide whether action is needed to keep thefinancial system stable after house prices notched up doubledigit rises, raising fears of a crash in the making.
The BOE also worries that some homeowners will be toostretched once interest rates rise, perhaps from next year.
The FCA, which introduced tougher underwriting rules forhome loans from banks in April, said the new standards werestarting to bite and changing the market.
"We are starting to see some slowing down," FCA ChiefExecutive Martin Wheatley said in an interview with BloombergNews.
Tightening the two-month old underwriting rules further isone option for the FPC, but Wheatley was unconvinced.
"I think we just have to monitor. I think it's too early totell," said Wheatley, who sits on the FPC.
Other options the FPC has include forcing banks to hold morecapital in case home loans default. (Reporting by Huw Jones; editing by Susan Thomas)
