Raising interest rates may not be the answer to containing house prices.
One of the major reasons; is that the present boom in house prices started with Brown's £6 billion-a-year raid on pension funds in 1997.
The destruction of this pillar of long term savings has resulted in heavy property investment and a corresponding fall in the value of equities.
Some parents are actually selling stocks to fund their children into the property market.
The knock on effect is devastating for young and old alike. Young couples cannot afford houses and pensioners' funds have lost considerable value.
Both have been forced into relative poverty. We are now in a crazy situation. Perhaps heading for Japanese disaster similar to that of
1990 when property values reached around five times their realistic levels.When the Stock Market gets more attractive (and this maybe brought about by a change in government), that I think, will be the danger time for house values.
Malcolm Shykles