Next Saturday, the Western Daily Press property supplement moves inside the glossy West Country Life magazine – to enjoy the benefit of high-quality paper and a stitched and trimmed finish. Advertisers will benefit from this crisper, more polished finish. Contact Robin Phillips on 07715 770449 or email him at r.phillips@b-nm.co.uk to enjoy the benefits of our property upgrade!
PROPERTY OF THE WEEK Stone Cross at North Stoke is on the market with Crisp Cowley PAGE 2
Call for cap on prices Bank of England urged to take the ‘froth’ out of future housing booms and prevent ‘dangerous’ build-up of debt BY VICKY SHAW wdproperty@b-nm.co.uk A five per cent cap should be placed on annual house price growth amid fears that the country is heading for a bubble, surveyors have suggested. The Bank of England should consider limiting yearly house price inflation to five per cent in order to take the “froth” out of any future booms and put a stop to any “dangerous buildup in household debt”, said the Royal Institution of Chartered Surveyors.
The body argued that sending out a clear message that the bank’s financial policy committee, which underpins stability, will not tolerate house price rises above a certain limit would restrict any over-the-top price expectations from sellers and discourage buyers from taking on too much debt due to fear of missing out on a house price boom. Rics suggested the bank could put the brakes on house price growth by, for example, imposing a ceiling on the amounts of money banks are
allowed to lend. It could put caps on the term of a mortgage, the amount people can borrow in relation to their deposit or the sum they can borrow in relation to their income. Fears have been raised that a recent surge in housing market activity will result in borrowers over-stretching themselves. Recent figures from Halifax showed that house prices were 5.4 per cent higher than last summer and Rics has said that 40 per cent of surveyors have been seeing house prices rise rather than
fall, the highest proportion in almost seven years. New Bank of England governor Mark Carney recently said the bank was “acutely aware” of the potential threats and said action would be taken to clamp down on mortgage lending, if needed. Rics said similar schemes had previously been used in places such as Canada, where Mr Carney was previously Bank of Canada governor. Rics senior economist, Joshua Miller, who compiled the research, said: “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, five per cent is one way of doing this.” Lenders, estate agents and property websites have been reporting signs of confidence flooding back into the housing market in recent months following the launch of Government schemes such as Funding for Lending, NewBuy and Help to Buy, which have widened the availability of loans and fuelled a price war
among mortgage providers. But the Council of Mortgage Lenders recently said talk of a housing boom was “premature”. It said while the housing and mortgage markets were showing “some initial signs of recovery this summer”, current house sales were still at lower levels than they were when the UK was recovering from a downturn in the early 1990s. Tougher mortgage lending rules will come into force next April to ensure home-owners can only take out mortgages they can afford to pay back.
Peep through the keyhole to view the West Country’s finest properties www.westerndailypress.co.uk
WDP-E01-S3
Improved quality!
1
Property West Country