A Bradford-based building society executive has backed calls for the Bank of England to delay any action to cool the housing market with prices outside London still well off pre-crisis levels.

The call came from Graham Beale, chief executive of Nationwide, the UK’s biggest building society, speaking as the lender reported record underlying pre-tax annual profits which more than doubled to £924 million as gross mortgage lending rose 31 per cent to £28.1 billion.

Andrew McPhillips, economist at Bradford-based Yorkshire Building Society, the second largest, has echoed Mr Beale’s view, suggesting the Bank of England should adopt “a watching brief”.

The Nationwide boss said “frenetic" housing market activity in London was starting to ease off while elsewhere in the country prices remained two per cent below 2007 levels – or 21 per cent when adjusted for inflation.

There has been speculation that the Bank of England will next month move to cool the market, possibly by asking lenders to restrict borrowing terms or being forced to hold more cash on their balance sheets.

However, latest figures show mortgage approvals falling and Mr Beale suggested waiting until October for a “more considered view” of how the market had developed.

He said: “Whatever happens in London, we could get unintended consequences by starting to destabilise the rise in the housing market. It’s an important aspect in the growth of the rest of the UK.

“I am a great believer in natural corrections. If house prices come up and up and up, there will come a point when people won’t pay or they can’t pay. I would allow the housing market to go through its cycle. We have had a lot of things going on and I think it’s important to allow that to consolidate and then take decisions as necessary.”

Mr McPhillips said: “The rate of growth in London has been a cause for concern and if this was to continue it would be likely that the Bank of England would take steps to address it. However, this would probably be through restrictions on some mortgage lending rather than by increasing interest rates.

“With the fluctuations in the market a watching brief may be a more prudent course of action as it appears the London market is cooling while there is still some way to go for the rest of the country.

“Taking Yorkshire as an example, house prices in our region are increasing in line with the national average when you exclude the capital.

“But this is not at such a high rate that you could really call it a bubble and there is still some way to go in the region before prices recover to their pre-crisis peak.”