Bursting the house price rise bubbles

The Royal Institute of Chartered Surveyors is calling for the Bank of England to limit house price rises. Photo: Press Association

Should we... could we.. put the brakes on house prices? Property surveyors fear that bubbles and froth over rises could tempt buyers into a dangerous build up of debt.

The idea is to make mortgages harder to get if annual rises go above 5%.

Let’s look at what's happening on prices. Forty percent of surveyors are now reporting rises in their areas: biggest is London with an annual price increase of 6.3%.

Lowest is Powys in mid Wales - with a fall of 14%.

So there we see one of the main problems of this new idea - the idea of a UK property market is a myth - what we have is very different markets, with different factors and widely different prices.

The UK property market is influenced by many different factors. Credit: Tim Ireland/PA Wire/Press Association Images

The Bank of England - now run by Canadian Mark Carney - say they are "watching and vigilant" on property prices... but they think we are still not in a bubble situation. I mention Canada because they tried this idea there - yet here there is no sign of it being adopted.

Others have been far more dismissive of the idea. The Institute of Economic Affairs say this idea is "ill conceived, inappropriate and unworkable".

Many people who want to get on the property ladder may feel angry at the proposal - after all there are enough financial barriers to home purchase without adding new ones.

There is, I think, a twist to this story. The surveyors are doing this because they are worried about a housing bubble...but by talking about rising prices like this they may actually increase expectations. In other words, they may add to the problem they are trying to solve.