House Price Growth 'Should Be Capped At 5%' A 5% cap should be placed on annual house price growth to prevent another property "bubble," surveyors have suggested. The Royal Institution of Chartered Surveyors (RICS) called on the Bank of England to limit yearly house price inflation to 5% in order to take the "froth" out of any future booms and put a stop to any "dangerous build-up in household debt." It suggested the Bank could put the brakes on house price growth by imposing a ceiling on the amounts of money banks are allowed to lend. It could also put caps on the term of a mortgage, the amount people can borrow in relation to their deposit or the sum they can borrow in relation to their income. The request - an unusual one from an industry group that typically benefits from rising prices - comes months before the Government begins to offer mortgage guarantees to "riskier" homebuyers under its controversial Help To Buy scheme. Fears have been raised that a recent surge in housing market activity will result in borrowers over-stretching themselves. Recent figures from the Halifax showed house prices are 5.4% higher than last summer, and the RICS said 40% of surveyors have been seeing house prices rise rather than fall, the highest proportion in almost seven years. Asking prices in London are up by 10% year-on-year, according to recent figures from property search website Rightmove. BoE Governor Mark Carney has vowed to prevent any new property bubble "Sending a clear and simple statement to the public that the Bank of England will not tolerate house price rises above 5% would help restrict excessive price expectations across the country," the RICS said. This policy would discourage households from taking on excessive debt out of fear of missing out on a price boom, and discourage lenders from rushing to relax their lending standards as they compete for market share. The industry group noted that limits on property price inflation have been used by a variety of countries, including Canada between 2008 and 2012, when Bank of England Governor Mark Carney headed the country's central bank. Speaking to a committee of MPs on Thursday, Mr Carney said the Bank was "acutely aware" of the potential threats and was watching the housing market closely as it recovers. But he insisted the market pick-up should be seen in context and remains a third to a quarter below pre-crisis levels. The Council of Mortgage Lenders added that talk of a housing boom was "premature." In its regular "news and views" release, it said while the housing and mortgage markets were showing some initial signs of recovery this summer, current house sales were still at lower pre-crisis levels.