With the general election less than a year away, politicians are clambering to lead the way in addressing voter concern about an overheating property market.
Bank of England governor Mark Carney has described house price growth as the biggest threat to the UK economy.
But while calling a London housing bubble has become a popular past-time for politicians, regulators and journalists who mostly live in the capital, clear solutions are less apparent.
There are a number of possible options available for policymakers looking to apply the brakes but most appear pretty blunt and are unlikely to achieve the desired impact.
Concern centres on strong London growth, up 17 per cent year-on-year on average compared to 8 per cent across the UK.
Politicians who think cutting Help to Buy will solve things should perhaps look at the statistics which show the tiny proportion of London property transactions which have used the scheme.
The North-west, where the market is far less buoyant, has seen double the amount of H2B deals. Any curtailing of the scheme puts at risk the positive effect it is having in regions which are far from booming.
Brokers report much of the H2B lending in London is around the £300,000 to £400,000 level, suggesting that lowering the threshold will have little impact. Due to the huge numbers of cash-rich buyers in the capital it is also hard to see how introducing LTV caps will do much to cool things down here.
An income multiple cap is likely to have more effect but would undermine the more sophisticated affordability rules recently introduced through the FCA’s mortgage market review.
Some may argue pulling a few blunt levers may work in so much as it would sway sentiment, which in itself could act as a coolant. This would be a very dangerous way to try and direct policy.
As the impact of curtailing the Government’s Funding for Lending Scheme and the MMR’s new affordability rules have yet to play out, it is too early for dramatic interventions aimed primarily at impressing voters.
Lack of supply is the obvious real problem but a quick and easy lever cannot be pulled. As Carney said this week: “We are not going to build a single house at the Bank of England.”
Over to the politicians who are happy to talk about increasing housing stock in general but are scared witless of the political impact of building more homes around local communities.
Paul McMillan is group editor at Money Marketing- follow him on twitter here