HC Deb 13 December 1962 vol 669 cc551-2
15. Mr. Frank Allaun

asked the Minister of Housing and Local Government and Minister for Welsh Affairs if he is aware that the average price of new houses has risen by 23 per cent. since 1959; and to what extent he estimates this is due to the increase in land prices.

Sir K. Joseph

I am aware of the source of the figure referred to by the hon. Member; but it would not be safe to base on it any generalisation about the effect of land prices upon house prices.

Mr. Allaun

Is the Minister aware that the site costs up to 40 per cent. of the price of a house, according to the Build- ing Societies' Association? Is he further aware that the L.C.C. recently had to pay £1,500 in site costs for each of 42 dwellings in Roehampton, or, allowing for interest, 33s. a week for this item alone; that many cities are now paying for land at double the price they paid in 1959 when the Government took off controls, and that the only solution is public ownership of land?

Sir K. Joseph

The hon. Member will not expect me to agree with the last part of his supplementary question. But I hope that he will accept that there is an inter-relationship between demand, land prices and house prices. It may be that in the areas of greatest demand land prices react to the demand and thus affect house prices, rather than merely being a passive resultant of land prices and house prices on their own.

Sir C. Osborne

Can my right hon. Friend confirm that the increase in new houses is due to a large extent to the fact that building wages in the last few years have risen by 17 per cent.? What proportion of the total cost of a new house is represented by wages?

Sir K. Joseph

That is another question. Although building prices have risen substantially in the last two years, I must confirm that land prices have also risen.

Mr. Mackie

If the Minister does not agree with my hon. Friend's solution, what is his solution?

Sir K. Joseph

The solution is being seen every year, in the vast and steady increase in owner-occupation and local authority building, despite all the worries of hon. Members opposite—and we intend to see that that increase is intensified.

Mr. M. Stewart

Surely there has not been an increase in local authority building. It is only half what it was eight years ago.

Sir K. Joseph

Yes, but compared with the time of lower interest rates under pre-Tory Administrations local authority building is increasing, and will increase further—and not only on the housing front but on every front for which local authorities are responsible.