House Prices

HC Deb 14 February 1973 vol 850 cc1255-7

1. Mr. Golding

asked the Secretary of State for the Environment what is the average increase in the price of houses since June 1970.

9. Mr. Hardy

asked the Secretary of State for the Environment what was the average amount and proportion by which the price of a new house rose during 1972; and the average price of such a house at the latest available date.

The Minister for Housing and Construction (Mr. Paul Channon)

The estimated average price of housing mortgaged with building societies in the second quarter of 1970 was £5,082 for new dwellings and £4,778 for second-hand dwellings. Corresponding figures for the fourth quarter of 1972 were £8,571 and £8,639 respectively. The increase in the average price of new dwellings between the fourth quarter of 1971 and the fourth quarter of 1972 was £2,520 or 42 per cent.

Mr. Golding

Is the Minister aware that the effect of this monstrous increase in housing prices is even further added to by the excessive interest rates charged by the building societies? Is he further aware that in this instance he will not be able to blame foreign factors, because this excessive increase in house prices is due to the Rent Act, to land speculation and to the inefficiency of private building firms?

Mr. Channon

I do not agree with all that the hon. Gentleman says. However, as my right hon. Friend explained to the House last week, the Government are naturally very concerned about the increase in house prices. I would refer the hon. Gentleman to what is said in the White Paper.

Sir Harmar Nicholls

The increase in prices is due to many causes, including shortages. Has the Department any record of the part played in these increased costs by the increases in wages paid to building workers, in the price of concrete, in delivery charges, and so forth?

Mr. Channon

I do not have those detailed figures with me, but there have been very substantial wage increases, as my hon. Friend points out.

Mr. Hardy

Does not the hon. Gentleman agree that those increases would be smaller than the profit made by land speculators in recent years? Does he not also agree that he and his party can no longer claim that ordinary people can still afford to buy a small new house, since the outgoings in respect of such a purchase would amount to at least £15 a week?

Mr. Channon

That is not so. If the hon. Gentleman will study the figures for mortgages taken out last year he will see, in respect of borrowers with incomes up to the average industrial wage, that the number of mortgages taken out increased from 114,000 to 147,000.

Mr. Ridsdale

Is my hon. Friend aware that bricklayers' wages have increased, at a conservative estimate, by at least 26 per cent? Are not bricklayers now earning between £50 and £100 a week?

Mr. Channon

I agree that wages have risen considerably. The average earnings index rose by 36 per cent. between the second quarter of 1970 and November 1972.

Mr. Frank Allaun

Does not the hon. Gentleman admit that the price for old houses has risen by 40 per cent? Does he further admit that part of the staggering increase in the cost of houses is due to the fact that families are being forced to try to buy houses, because of the catastrophic fall in council house building programmes?

Mr. Channon

The hon. Gentleman has a further Question on this point later on. The only short answer to the question of house prices is to provide more houses. [HON. MEMBERS: "Hear, hear."] I am very glad to have the support of the Opposition. I shall no doubt receive congratulations from the Opposition for the fact that private sector starts are so sharply up.