§ 9. Mrs. Angela KnightTo ask the Chancellor of the Exchequer what measures he has taken to assist the housing market over the last year.
§ Sir John CopeWe have introduced a number of measures to assist the housing market. The autumn statement announced additional housing measures of £750 million, plus time-limited measures to allow local authorities to spend nearly all their new capital receipts. The Budget doubled the stamp duty threshold to £60,000, 986 and, following the significant easing of monetary policy since last autumn, mortgage rates are now down to their lowest levels for 25 years.
§ Mrs. KnightDoes my right hon. Friend agree that it is interest rates that have the major influence on the housing market? Is it not correct that the low mortgage rates are giving very great encouragement to first-time buyers, the housing market as a whole and the construction industry, as new private housing starts have now increased by 20 per cent?
§ Sir John CopeI agree with all that. Private housing starts are up strongly, as are the completions and the particulars delivered. All that is the consequence of the measures that I have outlined, especially mortgage interest rates.
§ Mr. RaynsfordWill the Minister recognise that, following the short-term increase in spending as a result of the relaxation of restrictions on capital receipts and the housing market package, the rented housing market is likely, once again, to decline this year? Does he now recognise that there is no justification for preventing local authorities from spending capital receipts in the long term? Will he extend the relaxation of the restrictions next year as well as this year?
§ Sir John CopeWe will not announce anything of that sort at the moment. I notice that new public housing has risen in the first quarter of this year to the highest level for more than eight years. That will greatly help that part of the rented sector.
§ Mr. PaiceWill my right hon. Friend resist the calls to release those capital receipts in one go? Is it not the case that, however attractive it may be, that would add £6 billion to the bottom line of our public sector borrowing requirement? Labour Members appear to care about that figure.
§ Sir John CopeThat is indeed the case, and that is why we are cautious about it.