The industry has united to condemn calls for the Bank of England to set a 5% cap annual house price increases, warning the proposal will end in tears.
On Friday, the Royal Institute of Chartered Surveyors (RICS) called for the Bank of England to limit house price inflation to 5% a year to prevent another bubble, but the backlash has been swift.
Stuart Law, chief executive at Assetz, said: "While nobody one wants to see house prices rising at outlandish levels, artificial price controls always end in tears, and are not the way to approach this issue. A cap on property price increases would lead to a corresponding cap in developers building more homes for our rapidly growing population due to the suppression in demand.
“RICS is effectively asking for market prices to be manipulated, and thereby falsify the property market. This is outrageous and a poor economic solution to a simple supply demand problem. Let’s build more.”
James Moss, managing director of Curzon Investment Property, said that outside London, the recovery is still patchy. "The main driver for the forthcoming 'property boom' is central government policy. The Bank of England already has many options available to control bank lending, as stated by Mark Carney, without having to resort to arbitrarily capping house price growth. This includes the Help to Buy scheme, which will be opened up across the entire UK housing market in just three months."
Alex Gosling, director of low-cost online estate agent Housesimple.co.uk: "It's far too early to be talking about another house price bubble. The last thing we want to see is a return to the days of unsustainable double digit monthly price rises, but at the same time we don't want to be too restrictive and risk sending the market into reverse.
"What we need is steady, sensible price growth - it's just difficult see how this could be capped in quite the way RICS is suggesting."
The house price recovery is doing a lot more good than harm right now, said James Humphreys, senior investment manager at Duncan Lawrie Private Bank, said:
“At present, the housing market has a real spring in its step as the London house price boom begins to ripple out to the rest of the country. Help to Buy appears to have been successful in releasing demand and the Funding for Lending scheme has reduced funding costs for the banking sector, leading to a pick-up in mortgage lending.
“As well as the direct impact on the construction sector, it is leading to an increase in confidence around the country, particularly among consumers. Economic commentators are busily upgrading their growth projections for the UK, and after several years of stagnation, a gradual recovery appears to be taking hold."
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