Commenting on calls from the Royal Institute of Chartered Surveyors for a cap on house price increases, Professor Philip Booth, Editorial and Programme Director at the Institute of Economic Affairs, said:
"The call today from the RICS for the Bank of England to act to limit house price increases shows how muddled both monetary policy and housing policy have become.
“The Bank of England is restricting mortgage lending by more onerous capital requirements on banks whilst the government is subsidising people to buy houses they otherwise could not afford. Now it is being proposed that the central bank should try to cap house price increases. At the same time, the supply of houses is limited by planning controls, thus boosting house prices artificially.
“The RICS plan is ill-conceived, inappropriate in theory and could not be made to work in practice."
Notes to editors:
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