A 5% cap
should be placed on annual house-price growth amid fears that the country is
heading for a "bubble", according to a report from RICS.
It says a message that the bank's financial policy committee will not tolerate
price rises above a certain limit would restrict sellers' overblown
expectations and discourage buyers from taking on too much debt. RICS suggested
the bank could put the brakes on growth by imposing a ceiling on the sums banks
are allowed to lend. It could put caps on the term of a mortgage and on the sums
lent in relation to deposits or incomes, RICS argued. BoE governor Mark Carney
signalled to MPs yesterday that he was open to moves to cool Britain's housing
market if it began to over-heat.
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