Managing the inflation target is one thing but having the Old Lady manage what I do with my house is something else.  

Leaving aside the issue of the increased value of extensions, improvements, decorating or a change in local circumstances such as regeneration of derelict areas it seems that those who would be hardest hit by the proposal that house prices are to be capped are those looking to move up the ladder to cope with bigger families. Historically growing families benefitted from the combination of repaying part of their mortgage, increases in income and increase in property values to generate equity.

As real incomes have barely shifted in the last decade but interest rates (and hence the real cost of property) have come down it is little wonder that house prices have gone up and become the major driver behind movement in the housing market.

Put limits on prices and transaction numbers will plummet, estate agents will go out of business and growing families will be locked in to properties that are too small for them.  Once the shackles come off prices are likely to rocket unsustainably in response to the pressure of unanswered demand.

As has been shown time and again the real issue is that we are not building enough new homes.  That is where the solution lies.