A future Labour government
might seek to control house prices, it is reported.
It is thought that this
might involve giving the Bank of England a target for house price inflation,
similar to the existing mechanism for controlling inflation, which they would
meet by controlling mortgage availability. Alternatively there could be more
direct governmental controls.
The proposals are under
consideration by Shadow Housing Secretary John Healey and have not yet been
adopted as party policy.
Kate Barker, economist,
housing specialist and former member of the Bank of England Monetary Policy
Committee said the idea is ‘difficult’ and ‘absurd’, but did not rule it out as
impossible. She said on Twitter: “A house price target is a difficult one for
government. It is totally absurd for the BoE unless given control of a whole
range of other policies.”
In politics it is
apparently common practice to float proposals, frequently quite absurd, to see
what the reaction is before adopting a modified proposal which might have a
better chance of being voted in. So, it will be interesting to see what comes
of this idea in the politically turbulent months ahead.