A new warning has been issued saying that house prices are growing so fast in some areas, it could lead to a property bubble. The Royal Institution of Chartered Surveyors wants the Bank of England to cap house price rises at five per cent year.
It says the current rate nationally far exceeds that.
Our current housing market is not fit for purpose and schemes such as Help to Buy (taxpayer underwritten mortgages) only serve to make things worse by pumping more money into a constrained market.
Rics are right to call on the Government to get a grip on runaway house prices. With every rise in house prices, even more young people and families find themselves priced out of a home of their own, and trapped in an unstable private rented property.
The Royal Institution of Chartered Surveyors (Rics) is calling for the Bank of England to step in to prevent a possible housing bubble. Rics senior economist Joshua Miller, who compiled the research in the report out today said:
This cap would send a clear and simple statement to the public and the banking sector, managing expectations as to how much future house prices are going to rise.
We believe firmly anchored house price expectations would limit excessive risk taking and, as a result, limit an unsustainable rise in debt.
The Royal Institution of Chartered Surveyors (Rics) has called for the Bank of England to step in to "take the froth" from another housing boom. Rics has suggested a number of ways the Bank could slow the recent house price growth:
Imposing a ceiling on the amount of money banks are allowed to lend
Capping the term of a mortgage
Capping the amount people can borrow in relation to their deposit
Capping the sum people can borrow in relation to their income