Mortgage warning to young

Young professionals are taking on loans they 'may live to regret' as they scramble for properties in the booming housing market, an expert warned yesterday.

Sir Howard Davies, chairman of City watchdog the Financial Services Authority, said it would 'not be surprising' if there was a downturn in house prices in London and the South-East.

In an interview with BBC News 24, he admitted: 'There is some concern about the mortgage market.'

He said he was most concerned about 'over-borrowed, young professionals' in areas where house prices have risen very sharply.

The comments came less than a week after the Bank of England warned that further leaps in house prices could be followed by a sharp fall. Governor Sir Eddie George said the current rate of property inflation was 'unsustainable'.

The housing market has been fuelled by the lowest borrowing costs for nearly 40 years.

An explosion in buy-to-let properties has also made it harder for firsttime buyers to get a foot on the ladder.