BoE's Cunliffe says dangerous to ignore rising British house prices

LONDON, May 1 (Reuters) - The Bank of England will have todecide in coming months whether to cool surging house prices asit would be "dangerous" to ignore the momentum that has builtup, Deputy Governor Jon Cunliffe said on Thursday.

"It would be dangerous to ignore the momentum that has builtup in the UK housing market since the spring of last year,"Cunliffe told a banking industry dinner.

Mortgage lender Nationwide said on Thursday that Britishhouse prices last month recorded their biggest annual rise sincethe start of the financial crisis in 2007.

Growth in prices has not been limited to London and is dueto pent-up demand and tight supply of properties, Cunliffe said.

There was good reason to believe such a "mutuallyreinforcing combination" could lead to a period of sustained andvery powerful pressure on house prices, he said.

"This is a move that has been seen more than once in theUK," he added.

Cunliffe sits on the Bank's Financial Policy Committee (FPC)which has powers to make recommendations to regulators to takeaction.

"Whether and how to act further if, following the pause ofthe last couple of months, momentum continues to build, will bethe most challenging judgement the FPC will have to take in thecoming months," Cunliffe said. (Reporting by Huw Jones; Editing by Susan Fenton)