Oral question asked in the House of Lords, by Lord Greaves (Liberal Democrat). It was answered on Tuesday, 23 October 2007.

Housing: Prices

Question: My Lords, I sympathise with the Minister for his onerous afternoon of Questions, with three in a row, and I thank him for an Answer that did not actually say anything. Is it not the case that we can all now recognise that the size of the increases in house prices in the United Kingdom in the past 10 years—in all but the short term for some people—has been bad for the economy, bad for the efficiency of the housing market and particularly bad for those who have suffered from it, especially young and less affluent people who have not been able to afford to buy houses? Is the Minister aware of the comments made by the Chancellor of the Exchequer, Alistair Darling, which were reported in the press last Thursday? The Chancellor criticised the companies that have been fuelling, "““an unsustainable boom in house prices through irresponsible lending””." What will the Government do to make sure that, when the present dampening of the housing market is over, we do not have another series of unsustainable and irresponsible rises in house prices?

Answer: My Lords, rising house prices are not necessarily damaging for the economy—far from it. They produce very significant assets for families—and it should be recognised that family assets are 72 per cent above what they were in 1997 when this Government came to office—and therefore give householders the confidence with which to carry out their economic activity. The noble Lord will also recognise the high levels of employment that have obtained over that 10-year period. But of course he is right that we should be concerned about the affordability of housing, particularly for first-time buyers. That is why the Government are tackling the issue on both fronts, in the supply of housing by seeking to produce 46,000 extra houses per year under our new proposals, and by giving what assistance we can to first-time buyers in shared equity schemes and so on in order to tackle the problem of how people get on to the first rung of the housing ladder.

Secondary information