THE UK’s Labour Party are considering controversial measures to cap house growth, something they talked about in more detail this week. Shadow Housing Secretary John Healey said that the Bank of England could be asked to control house prices the same way they now do with inflation. How they would go about that isn’t exactly clear, but restrictions on mortgage lending seem the most likely method.
The proposals are a response to the rapid growth in UK property prices over the last decade or so, effectively pricing first-time buyers and those on lower wages out of the market. A recent think tank reported that the Bank of England should be set a target of zero house price growth for the next five years, allowing many peoples income to catch up with the sector. Obviously, many who already own their home, as well as free-market advocates, are likely to oppose the idea.