The Royal Institution of Chartered Surveyors has called on the Bank of England to limit annual house price inflation to 5% to prevent another property bubble.
RICS said the Bank should police its proposed cap in house price inflation through its Financial Policy Committee (FPC). If prices pushed above the limit, the FPC could enforce lower loan-to-value or loan-to-income ratios, shorten mortgage terms, or restrict lending to prevent them spiralling higher.
Property prices are already rising at more than 5% a year according to mortgage lender Halifax, and the RICS has joined a chorus of voices warning that such rises could become unsustainable.
Figures from LSL/Acadametrics on Friday showed a 30% rise in the number of first-time buyers.
"Sending a clear and simple statement to the public that the Bank will not tolerate house price rises above five percent would help restrict excessive price expectations across the country," the RICS report said.
"This policy would discourage households from taking on excessive debt out of fear of missing out on a price boom, and discourage lenders from rushing to relax their lending standards as they compete for market share."
The industry group notes that limits on property price inflation have been used by a variety of countries, including Canada between 2008 and 2012, when Bank Governor Mark Carney headed the country's central bank.
Under Carney's watch, Canada's national regulator the amount buyers could borrow in relation to their deposit and imposed more stringent credit checks - measures that appeared successful in bringing price inflation back down.
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