House Prices

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 26th January 1989.

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Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw 12:00 am, 26th January 1989

To ask the Chancellor of the Exchequer what has been the total rate of inflation in the average price of a house in the United Kingdom since June 1983.

Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw

As this Government are supposed to be the Government who keep down inflation, what have they been doing to help young couples to buy a house or even rent one from the council? Have not the Government priced young couples out of the market? Why did the Chancellor not urge the building societies to lend only two and a half times the annual income of an applicant, as they did many years ago? Why has the Chancellor sat back and done nothing, in the free market, when building societies are lending three and a half to four times annual incomes, and sending house prices rocketing through the roof? What advice would he give now to young couples who are desperately seeking somewhere to live?

Photo of Mr Peter Brooke Mr Peter Brooke Paymaster General (HM Treasury), Party Chair, Conservative Party

In response to that long question, I shall just say that in the first half of 1988, half of all building society loans went to first-time buyers.

Photo of Mr Nicholas Bennett Mr Nicholas Bennett , Pembroke

Does my right hon. Friend agree that the majority of people in this country recognise the great benefits of home ownership and the fact that mortgage rates go up from time to time as well as come down, but that the advantages of home ownership outstrip the short-term disadvantages?

Photo of Mr Peter Brooke Mr Peter Brooke Paymaster General (HM Treasury), Party Chair, Conservative Party

My hon. Friend reflects the Government's policy correctly.

Photo of Mr Tony Worthington Mr Tony Worthington , Clydebank and Milngavie

Does the Minister agree with the statement of his hon. Friend the Economic Secretary to the Treasury a few minutes ago that people have no more difficulty in paying their bills when mortgages go up than they did when they were low?

Photo of Mr Peter Brooke Mr Peter Brooke Paymaster General (HM Treasury), Party Chair, Conservative Party

That is not what my hon. Friend said. According to the Building Societies Association the main causes of mortgage problems are matrimonial problems, unemployment and financial mismanagement.