From page 2 of the Bank of England's Systemic Risk Survey 2013 H1
There are three new entrants to the top seven risks: the risk of property price falls (cited by 25% of respondents, up
11 percentage points), operational risk (up 10 percentage points to 24%), where 'cyber' security was most frequently
mentioned, and risks surrounding the low interest rate environment (the fastest growing risk, up 16 percentage points to 24%).
Participants' perceptions of an increased risk of property price falls (in particular residential property price falls) could be
consistent with views of prices becoming overinflated or about to become overinflated. Responses in the low interest rate
category focused on the risk that artificially low interest rates are creating distortions in asset allocation, potentially leading to
overinflated risky asset prices.
The complete and utter po-faced state of denial here is staggering.
It is the self same Bank of England which is pushing down interest rates with the sole aim of driving up asset prices (as distinct from their values), which for the man in the street means land prices i.e. a house price bubble.
Some older savers are rightfully unhappy with miserably low interest rates and annuity rates, but happily, the Bank of England has blinded or bribed a larger majority with the Fool's Gold of a house price bubble. And if ever their lovely bubble looks in danger of popping, well, there's only one thing for it isn't there? Reduce interest rates even further in the vague hope that they can fob off the priced out generation by telling them at least interest rates are low and there's always the Help To Sell scheme to help them onto the ladder etc.
Under Wadsworth's Square Law of Nequity, it is overall far, far cheaper to allow house prices to fall and to write down individual loans to the new lower value of the homes on which they are secured (so that nobody is stuck in nequity for years) than it is to try and keep a house price bubble inflated. The former is a knowable and affordable sum of money and this solves the problem. The latter is a huge and unknowable sum of money that merely results in larger costs in future.
But for some reason, they can't and won't contemplate that.