Chidgey said the Bank of England has enough tools at its disposal to reign in the market if it’s seen as getting out of hand.
He said: “The BoE has a wide range of tools at its disposal and an interest rate rise would be a very blunt tool for the job.
“The BoE has more tools available to them than interest rate rises so we could see the Financial Policy Committee modify stress levels to dampen the market.”
Experts have been predicting that the FPC will try to curb the UK's rapid pace of house price growth in the coming months.
A poll by Reuters of 30 property analysts found that a significant majority expect the FPC to flex its muscles soon after warnings from Sir Jon Cunliffe, who is responsible for financial stability at the BoE, that it would be dangerous to ignore what is happening in the housing market.
Chidgey was speaking at the Financial Services Expo in Manchester.