As new figures suggest a record rise in South Wales house prices, the Royal Institution of Chartered Surveyors has recently issued advice that The Bank of England should cap house price inflation at 5% to prevent another housing bubble.

New figures suggest house prices are rising at their fastest rate since their November 2006 peak , with Penarth and Cardiff being no exception to this.

Home owning is continuing to get out of the reach of many and increasing consideration to imposing a limit to house prices that is determined by the amount that banks are able to lend could be a sensible recommendation.

It’s interesting to see how such restrictive measures have impacted positively in Canada for example where they were imposed between 2008 and 2012, with buyers being given a limit to what they could borrow against their deposit, and stringent checks being imposed during the house buying cycle.

Capping house prices in this way supports buyers in ensuring they don’t overstretch themselves but still manage to secure the home of their dreams. As many families are pressured to secure a home, near a good school and close to local amenities, capping may make the market move more freely and not leave families struggling to make mortgage repayments.

Tony Jones, managing director of ACJ Properties, said:

“We will always support measures that add to consumer confidence. With house prices on the rise again, any measures that could be taken to help customers get on the market will always be favoured.

“House price inflation can prevent many from buying, and indeed selling, their homes and is an issue that could well need addressing in the near future by the Bank of England.

“The UK house price index is just short of its peak in 2008 , and avoiding any further rises in inflation will be beneficial to those looking to get on the property ladder or move homes.”