Housing Market (Hansard, 24 February 1993)

§ 17. Sir Fergus Montgomery
To ask the Secretary of State for the Environment if he will make a statement on the effect of the housing market package announced in the Chancellor's autumn statement on the housing market.

§ The Minister for Housing and Planning (Sir George Young)
We now expect housing associations to exceed their original target of 16,000 purchases by well more than 1,000. Sixteen thousand six hundred and sixty six purchases have already been approved and more than 5,700 purchases completed, so nearly 6,000 homeless families have already benefited from this initiative. In addition, cash grants will enable 3,500 housing association and local authority tenants to become home owners, freeing their current homes for homeless families. Taken together with the recent substantial fall in interest rates, this package should certainly have a positive impact on the housing market.

§ Sir Fergus Montgomery
Does my hon. Friend agree that the £580 million allocated to the Housing Corporation to enable housing associations to buy 17,000 properties must, of necessity, help to get the housing market moving again?

§ Sir George Young
My hon. Friend will be pleased to learn that the Royal Institution of Chartered Surveyors came to the same conclusion: that the steps that we have taken have helped to restore confidence in the housing market and that, to use its words, the fundamentals for recovery are now in place.

§ Mr. Raynsford
Does the Minister accept that the properties acquired under the housing market package, although welcome, will not be sufficient to keep pace with the increased number of repossessions since the package was announced in the Chancellor's autumn statement? Does he recognise that a far more energetic housing programme is required if we are to meet the needs of the badly housed and the homeless? When will he accept that local authorities should be able to use their accumulated capital receipts for housing purposes, as he himself argued 10 years ago?

§ Sir George Young
I regret the hon. Gentleman's rather grudging response to the substantial injection of money into the housing market in the autumn statement, which will enable some 17,000 families within a period of four months to move into decent accommodation. As for repossessions, the hon. Gentleman will know that the recent figures for court orders showed a substantial reduction of about 23 per cent. As interest rates fall, the pressure on home owners will, of course, be reduced substantially.

§ Sir Michael Neubert
While recognising the beneficial effects of the autumn statement measures on the housing market, may I ask my hon. Friend whether there is any encouraging evidence of increased activity in new house building?

§ Sir George Young
The reduction in base rates from 15 to 6 per cent. dramatically alters the terms of trade for 881 house purchase. That fact, coupled with the reduction in house prices over the past three years, means that home ownership is now a much more practical and attractive proposition and I am sure that builders will take heart from that.

§ Mr. Battle
It strikes me that the Minister is having difficulty convincing his colleagues of any movement in the housing market. Will he inform the House how many housing associations have bought only semi-developed sites as opposed to complete homes which, in practice, breaks the Government's instructions for the package and will mean that the number of homes that he boldly claims will be available are not yet built? People in desperate need cannot camp on the footings of speculative sites bought with public money. What has happened to the Government's policy of buying empty repossessed houses?

§ Sir George Young
The hon. Gentleman is totally misinformed. The housing market package is aimed at houses which will be occupied by the end of March. There is no question of our buying houses that are half-completed.

§ Mr. Hendry
Does my hon. Friend agree that, taken together, policies such as having housing associations as managing agents, the rough-sleeping initiative, the flats above shops initiative and the Government's task force for providing new uses for empty properties owned by the Government amount to the most concerted effort ever to tackle homelessness and are a clear demonstration of the Government's determination to tackle the problem?

§ Sir George Young
I congratulate my hon. Friend on summarising a range of attractive and effective housing policies which are bringing decent homes within the reach of more and more people.