House Prices (Hansard, 18 October 1972)

§ 5. Mr. Skinner
asked the Secretary of State for the Environment what are the figures for average house price increases since 18th June, 1970, both for newly-built and second-hand dwellings.

§ 11. Mr. Greville Janner
asked the Secretary of State for the Environment by what percentage the cost of an average house is estimated to have risen since the month of June, 1970.

§ Mr. Amery
The average price of new private dwellings mortgaged with building societies was 37 per cent. higher in the second quarter of 1972 than in the second quarter of 1970. The corresponding increase for second-hand dwellings was 45 per cent.

§ Mr. Skinner
The right hon. Gentleman should be ashamed of those figures. Is not he aware that this is Government-sponsored inflation, for which the Housing Finance Act is primarily responsible? What does he intend to do about the property speculators, who are printing their own money? What good is a £2 wage rise when the average semi-detached house is rising in cost by as much as £1,000 a year?

§ Mr. Amery
When the hon. Gentleman says that we should be ashamed of the figures, he should bear in mind that, in the first half of 1972 as compared with the first half of 1970—the last six months of 242 the Labour Government—31 per cent. more mortgages were given to first-time purchasers, 30 per cent. more borrowers were under the age of 25 and over 40 per cent. more mortgages went to people with up to the average manual worker's wage earnings. What has happened is that there has been an increase in the money in people's pockets and an increase in the credit facilities available, for which this Government, far from being ashamed, can take credit.

§ Mr. Janner
Is not the right hon. Gentleman aware of the enormous hardship that is being caused to ordinary People, particularly the young married couples, by the scandalous increase in housing prices? Is not he prepared in the circumstances to stimulate and subsidise local council building so that people who need homes will get them?

§ Mr. Amery
The hon. and learned Gentleman will appreciate that, when I point out that 31 per cent. more mortgages went to first-time purchasers, 30 per cent. more borrowers were under the age of 25 and over 40 per cent. more mortgages went to people with up to the average manual worker's earnings, it does not quite reflect the frustration which he has expressed. One thing I am keen to do is to encourage the sale of council houses, and this can be done at a 20 per cent. discount and will tend to stabilise the market at the lower end. What is significant is that the cost of second-hand houses has risen more than the cost of new houses, reflecting an increase in demand at the lower end of the scale.

§ Mr. Farr
What will be the effect on the prices of new houses of the recent award to the building workers?

§ Mr. Amery
It will have some effect, but I think that the prices reflect rather more the extent and buoyancy of the demand than the cost of either materials or labour.

§ Mr. Frank Allaun
Does not this fantastic increase in house prices put them far beyond the reach of most wage earners? Does it not stress the need to build more council houses instead of cutting down the council house-building programme, which is what the Government's policies have resulted in?

§ Mr. Amery
The figures I have just quoted show that far more people are 243 buying their own houses and that far more people at the lower end of the income scale are buying houses than during the last six months of the Labour Government. But this is still not good enough and I want to see more done. The only way to achieve that is to increase the supply of houses in relation to demand, and in the first six months of this year 43 per cent. more private houses were started than in the first six months of 1970.

§ Mr. Idris Owen
Is my right hon. Friend aware that it is not constructional costs which have created this fantastic increase in the price of houses as much as land acquisition prices?

§ Mr. Amery
Yes, Sir. I think my hon. Friend is on to a good point there. But I draw his attention to the fact that 18 per cent. more council houses have gone out to tender than in the last six months of the Labour Government.