It’s Absurd, Labour Government Could Control House Prices

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.  

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Source Estate Agent Today
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