Home » World News » Bank of England must limit house price booms, says Rics

Bank of England must limit house price booms, says Rics

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 540 other followers

Tweet!

Error: Twitter did not respond. Please wait a few minutes and refresh this page.

_69835333_69835332

The Royal Institution of Chartered Surveyors (Rics) said that a 5% annual rise should trigger caps on how much people could borrow relative to their incomes or the value of the property.

It is not suggesting that sellers should face a limit on how much they could charge for their homes.

The Bank said it was being vigilant.

Activity in the UK housing market has picked up in recent months after a few years of inactivity during the financial crisis.

There has been considerable debate during the week about the future of the UK housing market and the potential for government schemes to create an artificial price bubble.

Some forecasters are suggesting increases in house prices could break through the 5% barrier this year, owing to increasing demand from first-time buyers at a time when the number of homes for sale remains low.

‘Firmly anchored expectations’
Joshua Miller, senior economist at Rics, said that it was important to stop any debt-fuelled house price advance.

“The Bank of England now has the ability to take the froth out of future housing market booms, without having to resort to interest rate increases. Capping price growth at, say, 5% is one way of doing this,” he 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 Bank’s governor, Mark Carney, told MPs on Thursday that the Bank was vigilant on house prices but that parts of the country had not seen any recovery in the housing market.

In previous speeches, he has said that he has a toolkit in place to keep a lid on any potentially damaging boom.

This includes asking, but not telling, banks to limit how much they can lend to individuals and making them set aside more capital if they want to carry on providing mortgages.

‘Build more homes’
Simon Rubinsohn, chief economist at Rics, told the BBC that the cap was more of a “speed bump” for the housing market “so people wanting to enter the market are aware of some of the risks”.

He said that the 5% level could be debated and there needed to be a regional dimension to reflect housing market activity in different parts of the UK.

Rics members, including estate agents, wanted a stable market, rather than a volatile one, he said, adding that he did not believe there was a house price bubble at present.

In its report, Rics pointed to the example of Canada – the former home of Mr Carney – where the central bank took action to limit mortgage availability.

However, Sir Howard Davies, former deputy governor of the Bank, said that a cap would not work.

“The problem is that we are not building enough homes,” he said.

Figures from the Office for National Statistics, published on Friday, showed that demand for new public and private housing helped push up construction orders.

Any limit on house price rises would be resisted from those who remain in negative equity in some parts of the country. It would also be unpopular among first-time buyers if there was a restriction of mortgage lending.

Recent house price surveys show increases in prices, but this was compared with some drops a year ago.

The Halifax survey said that prices had risen by 5.4% in the year to August, while the Nationwide said house prices in August were rising at an annual rate of 3.5%.

The Nationwide compares prices in one month with the same month a year ago. However, the Halifax compares a three-month period with the three-month period in the previous year.

Advertisements

34 Comments

  1. My Homepage says:

    … [Trackback]

    […] Informations on that Topic: kackerwords.wordpress.com/2013/09/14/bank-of-england-must-limit-house-price-booms-says-rics/ […]

  2. Is it honestly possible to get off kidney dialysis? Aussie naturopath states that it actually is.

  3. boilers says:

    boilers

    Bank of England must limit house price booms, says Rics | Global economy & finance journal

  4. Cialis says:

    you’re in reality a good webmaster. The site loading velocity is amazing.
    It sort of feels that you’re doing any unique trick.
    Furthermore, The contets are masterpiece. you have
    done a great job on this topic!

  5. Jerold says:

    Howdy! This is my first visit to your blog!
    We are a collection of volunteers and starting a
    new initiative in a community in the same niche.
    Your blog provided us beneficial information to work on.
    You have done a outstanding job!

  6. stairlifts says:

    stairlifts

    Bank of England must limit house price booms, says Rics | Global economy & finance journal

  7. credit score says:

    My brother recommended I might like this website.
    He was totally right. This post actually made my day. You
    can not imagine simply how much time I had spent for this info!
    Thanks!

  8. Every weekend i used to go to see this website, because i wish for
    enjoyment, as this this web site conations in fact fastidious funny information too.

  9. dog collars says:

    It’s awesome to pay a quick visit this web site and reading the views of all colleagues concerning this
    piece of writing, while I am also zealous of getting knowledge.

  10. your reputation three months ago starts to

    spark panic attacks as the deadline looms. you know what you want to say, and have a file-folder full of notes and research, but “real” work obligations are pressing and you simply lack the time to pull it all together.when deadlines

  11. Today, I went to the beach with my kids. I found a sea shell and gave it to my 4 year
    old daughter and said “You can hear the ocean if you put this to your ear.” She put the shell to her ear and screamed.
    There was a hermit crab inside and it pinched her ear.
    She never wants to go back! LoL I know this is totally off topic but I had to tell someone!

  12. job, but if you are really in

    need of quick ways to make money, you need to take a part-time job. be a freelance writer, a virtual assistant, a waiter, bartender or take jobs on craigslist. be creative.if you want to get more ideas, search your local craigslist

  13. benefit by your guest post? the only

    constraint is to get your guest post approved by top blogs. they have strict criteria to accept guest blogs, i mean guest post should be grammatically correct and should be informative. in guest posts you can put link of your blog,

  14. My brother recommended I might like this blog.

    He was totally right. This post truly made my day.
    You cann’t imagine simply how much time I had spent for this info!
    Thanks!

  15. This post will help the internet users for building
    up new website or even a blog from start to end.

  16. When I originally commented I clicked the “Notify me when new comments are added” checkbox and now each time a comment is added I
    get four emails with the same comment. Is there any way you can remove me from that service?
    Bless you!

  17. Wow, this article is good, my younger sister is analyzing these things, therefore I am going to
    convey her.

  18. stairlifts says:

    You r-e trying to find a stairlift because your capability to defeat a high flight of stairs has been, for just one reason or another,
    impaired.

    Because of this fact alone, the parts and components adding
    to safety are rightfully your number one concern.

  19. Incredible! This blog looks exactly like my old one! It’s
    on a totally different topic but it has pretty much the same page layout and design.
    Wonderful choice of colors!

  20. Hosea says:

    Hi every one, here every one is sharing such know-how, therefore it’s
    good to read this website, and I used to pay a quick visit this website daily.

  21. on bing says:

    Developing Strategic Aims

    Respect to article author, some wonderful information.

  22. An Horrible Unavoidable fact Regarding Your Lovely japan Dream

  23. Overseas Announcement – women Considered An Essential In today’s market

  24. Halt Protesting and complaining And Initiate a personal men Marketing strategy As a substitute .

  25. I’d believe You Also Make Some of these Slipups With bag ?

  26. Generating Traffic Strategy That’s Even Assisting bag-masters Grow

  27. Info– watch Will Play An Important role In Any Site administration

  28. Excellent post. I usеd tߋ be checking continuously tҺis weblog and I’m impressed!
    Extremeely uѕeful informatіon ѕpecifically thee ultimate phase 🙂 Ι handle sych
    info mսch. I was lоoking foг ths partiсular іnformation fօr ɑ long time.
    Thank үou and bеst of luck.

  29. naturally lіke үoսr website hоwever yоu need to tame ɑ looҟ at tɦe spelling оn seѵeral of yօur posts.
    Ϻany of them агe rife wih spelling pгoblems ɑnd I find
    іt vеry troublesome tο tеll the truth on the otherr hand I will
    defіnitely ϲome baϲk agаin.

  30. outline of your reader’s needs and wants.

    what are needs? peace-of-mind, safety, security, approval, and other “ego-based” needs. what are wants? learning where to buy “pre-1970 chevy corvettes”, learning how-to restore these cars, knowing where to get parts, finding-out how-to show the ca…

  31. article says:

    designer to help you create an attractive

    banner ad and then contact the site owner. negotiate for the best price and make sure your advertisement will be posted on the specific web page where your prospective customers frequent.social media is king these days therefore it is important that

  32. new life to the old blog posts.

    have readers click on an old blog post by including its link in the sweepstakes contest. insist the readers to read and comment on the old blog post to be able to enter the contest. it will bring new visitors and

  33. way. instead of you thinking of what

    to write, you are bothered by the rumblings in your belly. going to a spot in your room where you could be inspired to write could be ideal. face towards the wall of your room where a nice picture frame of

  34. summarizing relevant skills, describing your work style,

    conveying your brand, and quickly making your point to employers isn’t easy for anyone – even a skilled writer or marketer!therefore, you’ll want to read through this list of common resume blunders to see if you recognize your own resume. then

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: