§ LORD GARNSWORTHYMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government what they intend to do to curb the continued and exorbitant increases in the price of houses offered for sale.]
669§ THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD)My Lords, the best hope for an easier market lies in increasing the supply of houses for sale. In 1971 completions in the private sector were nearly 13 per cent. up and starts about 26 per cent. up on 1970. There is every reason to hope for continuation of this rising trend.
§ LORD GARNSWORTHYMy Lords, are the Government satisfied that prices should have risen in 1971 by 21 per cent.? Do they think that this helps in the fight against inflation?
§ LORD SANDFORDMy Lords, my information is that prices of new houses rose by 12.6 per cent. and that the increase in earnings was 11.2 per cent.
§ LORD GARNSWORTHYMy Lords, is the Minister aware of the report by the Nationwide Building Society which was issued, I think, at the beginning of this month? Do the Government accept the forecast by Mr. Stanley Morton that a three-bedroom semi-detached house now costing £8,500 could be worth £18,000 in five years?
§ LORD SANDFORDMy Lords, I should like to look into that matter and write to the noble Lord.
§ LORD PARGITERMy Lords, would the noble Lord analyse the figures a little more and tell us what the rise would be in the so-called more desirable areas in the South-East as against the more depressed areas of the country?
§ LORD SANDFORDMy Lords, perhaps it would be best if the noble Lord would write to me and say exactly what questions he wants answered, and I will then do my best to supply the answers.
§ LORD ROYLEMy Lords, can the noble Lord tell us what proportion of the increase in the price of houses we may attribute to the rise in the price of land?
§ LORD SANDFORDYes, my Lords, but not without notice. I will write to the noble Lord.
§ LORD BESWICKMy Lords, the Question asked the noble Lord what the Government intend to do to curb this trend of increasing prices. Are we to 670 understand that the answer is, "Nothing"?
§ LORD SANDFORDNo, my Lords, the answer is that we intend to encourage the supply of more houses for sale.
§ LORD GARNSWORTHYMy Lords, does not the Minister consider that the so-called "fair rents" Bill, the Housing Finance Bill, is likely to exacerbate the position rather than improve it?
§ LORD SANDFORDNo, my Lords. The purpose of the Housing Finance Bill is to introduce fair rents as between landlord and tenant and at the same time to apply housing subsidies to the tenants who need them most and in the housing areas where they are most needed. A side-effect may be to increase the demand for owner occupation, but that is a trend which both the noble Lord's Party and mine want to see encouraged.
§ LORD GISBOROUGHMy Lords, is my noble friend aware that the price of land in the North-East has shot up, and that it started to do so at the time of the establishment of the Land Commission?
§ LORD SANDFORDMy Lords, that may well be so.
§ LORD ROBBINSMy Lords, would not the noble Lord agree that the undoubted rise in the price of houses is to be regarded principally as a consequence and not a cause of inflation?
§ LORD SANDFORDMy Lords, I think that is very likely so.
§ LORD LEATHERLANDMy Lords, if the noble Lord agrees with his noble friend that the price of land shot up when the Land Commission was established, why has not the price gone down in the same measure now that the Land Commission has been abolished?
§ LORD SANDFORDMy Lords, there are no doubt several reasons, but I think one of the most significant is the one mentioned by the noble Lord, Lord Robbins.
§ LORD DOUGLASS OF CLEVELANDMy Lords, can the Government really sustain their norm of an incomes policy when outgoings in respect of housing are rising, as a result of their policy, as rapidly as they are at the present time?
§ LORD SANDFORDMy Lords, that takes us into wider matters which do not arise on the original Question.
§ VISCOUNT MASSEREENE AND FERRARDMy Lords, is my noble friend aware that most noble Lords do not appear to have heard him say in his Answer that the rise in earnings was 11.2 per cent. in the same period?
§ LORD GARNSWORTHYMy Lords, is it not a fact that the price of land has risen more steeply since the Land Commission was abolished than before?
§ LORD SANDFORDMy Lords, that may be so, but there are a number of factors at work, and one of the most significant is the one mentioned by the noble Lord, Lord Robbins.