Newspaper article The Journal (Newcastle, England)

Agents Attack RICS Price Rise Limit Plan

Newspaper article The Journal (Newcastle, England)

Agents Attack RICS Price Rise Limit Plan

Article excerpt

NORTH East property experts have hit out at the report from the Royal Institution of Chartered Surveyors saying that the Bank of England should use its powers to limit house price increases to 5% a year to "take the froth out" of price booms.

The Royal Institution of Chartered Surveyors - RICS - said that a 5% annual rise should trigger caps on how much people could borrow relative to their incomes or the value of the property.

Duncan Young, of property agents Sanderson Young, said: "It's impossible to restrain a free market within a free country and the beauty of living in the UK is the freedom we have to choose what we like.

"Demand within hotspots of any residential market will dictate price and although the economy and financial measures can control market demand, it is important to ensure that freedom of choice on all properties exists.

"The gap between the London market and the regional market is vast and really all the concern about property inflation relates to London rather than the national average."

Sam Gibson, head of agency at Strutt and Parker's Morpeth office, said: "The surprise announcement by RICS, suggesting a cap on house price growth as a way of tackling economic risk taking and debts, is a facile one. As a member, I am concerned that RICS has shown a lack of understanding of the housing market. "It is important to realise there is not a uniform property market in the UK. To understand the market, it is imperative to consider all sectors and all geographical areas, and London and the SE have seen rises greater than the rest of the UK.

"Although there is talk of a price bubble, which I believe is hyperbole anyway, it doesn't feel like that across all areas of the UK. The London market, which has seen the greatest price surge, has lots of cash buyers and the RICS policy suggestions do not affect these types of purchasers. Trying to limit areas that are seeing the highest price growth means other regions may suffer as a result.

"If you try to cap house loan to income ratios, an instrument that RICS is suggesting, all you're doing is distorting the natural movements of the market. …

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