I've written here before about the ways in which the Bank of England could control the housing fledging recovery/boom/bubble (in the north, the south and London respectively) if it felt like it hereand here.
The upshot is that the Financial Policy Committee can now control the amount of credit that goes to any one sector at will. This is entirely new territory for this generation of central bankers, and was little understood until quite recently the press has only just begun to discuss it.
The problem is that it's pretty politically charged stuff. Our elected government clearly wants house prices to rise and fast. If it didn't, it wouldn't be persevering with Help to Buy it would by now at the very least have cut the threshold for borrowing under the scheme from the price of a nice house in the booming south (£600,000) to the price of a nice house in the faltering north (more like £300,000).
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Given this, for the Bank of England to impose new affordability criteria on top of the new Mortgage Market Review rules; to force the banks to hold more capital against mortgages; or to simply insist on limited lending all round, would look, as the FT puts it, rather like "giving with one hand and taking away with the other."
So will the (technically) fully independent Bank of England use any of its powers? If it does it will need to act pretty fast. Research, says the FT, shows that if the authorities "act too cautiously" they tend to end up slowing rather than preventing bubbles.
Since 2009 the Bank of Israel has taken nine separate 'macroprudential' measures to cool its housing market. But house prices are still 25% above their historical averages relative to incomes. Why? It might have something to do with limited supply and a base rate of 0.75%.
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