New house building reached 160,000 last year, the highest level since 1990. When I met Shelter and other housing organisations this week, they welcomed what they described as outstanding progress since 1997 on investment in existing social housing and in creating more homes for people on low income. But they also called for further progress in the comprehensive spending review and supported Kate Barker's conclusions that supply is not yet fully meeting Britain's long-term housing needs.
I am grateful to the Minister for that reply. Despite Kate Barker's view, is the Minister aware that in Cornwall the housing stock has more than doubled in the last 40 years? It has grown faster than almost anywhere else in the country, but the housing problems of local people have got significantly worse. Indeed, in my constituency last year, five times as many properties were sold to second-home buyers as to first-time buyers. Does the Minister accept that simply heaping tens of thousands more homes into a supposedly homogenous and uniform market does not work in places such as Cornwall, and that much more sophisticated mechanisms are needed? Market equilibrium does not result in affordable homes for local people.
We certainly do need to be smart about how we take this issue forward. We need more homes, and we set the objective in the pre-Budget report in 2005 of increasing the number of net additions to 200,000 a year within 10 years. That is important. We also need help for first-time buyers, and that is why we raised the threshold for stamp duty. We also need to go further on social housing. By next year, we will have increased the number of new social homes by 50 per cent. over three years, from 20,000 up to 30,000 a year. My right hon. Friend the Chancellor has said that going further in that particular area, which will be important for the hon. Gentleman's constituency, will be a priority for the comprehensive spending review.
The number of people registered for rehousing in the city of Newcastle is five times as high as it was six years ago. Low-income families on tax credits—the very thing that we were discussing earlier—simply cannot afford either to rent or to buy. That affordability gap, rather than housing supply, is the central problem. People are being priced out of their neighbourhoods because they cannot afford to rent or to buy.
My hon. Friend will recognise that there is a link between the number of homes available and the price that people need to pay for them. I agree entirely that people in a number of parts of the UK face some very big and difficult problems in gaining access to the housing market. Further progress in that regard will be a priority in the comprehensive spending review, but it is also worth noting that total household-sector interest payments are currently 9 per cent. of disposable income, compared with 15 per cent. in 1990. That shows that some good progress has been made.
I am sure that the Chief Secretary shares my concern about the problems that first-time buyers face in getting a foot on the housing ladder. In my constituency of Basingstoke, the difficulties are significant. Last year, just 36 per cent. of new loans—that is, one in three—were made to first-time buyers, a significant reduction from the 1990s. What assessment has he made of the other up-front charges in addition to stamp duty that first-time buyers have to pay before they can buy their first home? Those charges place an enormous barrier in the path of people who, like my constituents, are finding it very difficult to get a foot on the ladder.
We need to do more to address the challenges facing first-time buyers, and I hope that the hon. Lady will welcome the increase in the stamp duty threshold, as that will be particularly useful and helpful. In addition, I remind her of the work that has been done on shared equity: we now expect 160,000 households to be helped into home ownership by 2010 through shared equity in various forms, and that is double the original estimate. We are making progress, although there is no doubt that more must be done. I am confident that, in the CSR, we will be able to announce steps that will help further.
Does my right hon. Friend agree that investment in housing and social housing is important to helping people get on to the housing ladder? That is especially important in my constituency, where average earnings are around £20,000. What would be the effect on the social housing budget if overall public expenditure were to be reduced by the implementation of a third fiscal rule?
I am afraid that the effect would be catastrophic. Great progress in social housing has been achieved through the investment in the existing social housing stock about which Shelter and other organisations spoke to me earlier this week. Another factor has been the 50 per cent. increase over the past few years in the number of social houses being built. We need to maintain the investment and go further. I am confident that that will happen, but I am afraid that a third fiscal rule would take us very sharply backwards.