House Prices

Treasury written question – answered on 13th May 2004.

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Photo of Gordon Prentice Gordon Prentice Labour, Pendle

To ask the Chancellor of the Exchequer what economic instruments are available to him to moderate the rise in house prices.

Photo of Ruth Kelly Ruth Kelly Financial Secretary, HM Treasury

In Budget 2003, the Chancellor noted that a reduction in housing market volatility would enhance macro-economic stability. He asked Kate Barker to review housing supply in the UK, and David Miles to review the UK mortgage market.

At the time of Budget 2004, both reviews presented their final reports. The Government have welcomed their analysis and recommendations for action.

As recommended in the Barker Review, the Government are implementing a programme of change to the planning system and to the delivery of development, consulting with stakeholders as necessary. The Government accept the case for releasing more resources to boost housing supply, improve affordability and lock in macro-economic stability, and will make a start in the forthcoming Spending Review.

The Government endorse David Miles' conclusion that urgent reform is desirable to make the UK mortgage market work better for consumers in a number of areas. The FSA has in train reforms in the mortgage market, which will move to statutory regulation on 31 October. The Chancellor has asked the FSA to consider and report on the further reforms proposed by David Miles.

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