The government says it is worried about the rapid rise in house prices in the south east but is scared to increase the bank rate in case it turns the economy back into recession. The problem is that house prices in the rest of UK are not increasing so rapidly and would be more vulnerable to any increase in mortgage interest increase.
So why not use a form of taxation which can be levied geographically? The stamp duty (tax on house purchase) could be increased on transactions within certain postcodes.
It won't happen for two reasons. Firstly politicians are more worried about votes than they are about the electorate or the economy. Secondly, no-one in government reads my blog. How exclusive is that?