Written question asked by Ben Chapman (Labour) on Tuesday, 31 October 2006, in the House of Commons. It was due for an answer on Thursday, 2 November 2006. It was answered by Yvette Cooper (Labour) on Monday, 6 November 2006 on behalf of the Department for Communities and Local Government.

Housing

Question: To ask the Secretary of State for Communities and Local Government what assessment she has made of the effect of large bonus payments to people employed in the financial services industry on house prices in London.

Answer: As part of the Government’s response to the Barker Review of Housing Supply, the Government undertook detailed analysis and modelling of affordability, as detailed in the research publication ““Affordability Targets: Implications for Housing Supply”” (ODPM, 2005). The modelling took into account rising incomes over the period and this analysis contributed to the decision to set an ambition to increase housing supply to a level of 200,000 annual net additions by 2016. It looked at long term prices, rather than short term pressures in individual locations. The new National Housing and Planning Advice Unit will provide more detailed assessments for regions and local areas.At an aggregate level house prices are affected by a wide range of variables, including interest rates, level of household income and flexibility of the credit market.

Secondary information