"Government's new message to middle classes: Don't regard your home as a retirement nest egg
Ministers will fight to prevent dramatic house price rises – warning middle class families that they should not rely on their homes to fund their retirement.
Housing Minister Grant Shapps said the government would seek to ensure property prices rise more slowly than incomes to prevent a repeat of the housing boom that has made it impossible for a generation to get on the housing ladder.
Mr Shapps issued a stark warning to the middle classes that they will no longer be able to use rising property prices as a retirement nest egg.
Calling for an end to the ‘lottery’ of the housing market, Mr Shapps said: ‘People should think of homes as a place to live rather than a pension.
‘What is required now is a period of house price stability. House price booms keep people out of the market. And house price busts mean people’s homes are worth less than they paid for them.’
House prices fell 3.6 per cent in September, the biggest monthly fall since records begain in 1983, wiping £6,000 off the value of the average home in just one month.
But average prices, currently just over £162,000, nearly double the £85,000 average a decade ago.
Mr Shapps stressed that he does not want to see ‘a dramatic fall in house prices’.
But he said: ‘I think we need a market that’s boring, where the pressure of making what could be the single biggest financial decision of your life, is based on your needs and desires, not on whether you feel lucky. Buying a home shouldn’t be like playing the lottery.’
Mr Shapps message is unlikely to appeal to many grassroots Tories who have relied on regularly rising house prices to fund their retirements.
But the housing minister warned that rising prices have created a ‘Sorry’ generation, a reference to the 1980s sitcom in which Ronnie Corbett played a middle aged man who lives with his mother.
‘With a house now liable to cost perhaps seven times someone's earnings, it is no surprise that the average unsupported first-time buyer is now 37 years old,’ he said.
‘Sorry was once a joke, now it’s real life. We’d like to make it a joke again.’
Defending his stance, he said: ‘The exact same people in Middle England who want a retirement nest egg will say that their child can’t leave home because they can’t afford it.
‘Over time we want to move to a position where house prices continue to grow but peoples’ ability and purchasing power increases quicker.’
A recent survey, from the National Housing Federation, found around 30 per cent of middle-class parents would actually like house prices to drop to help their children.
In August, just 18,300 loans were handed out to first-time buyers, compared to 19,300 in July, and up to 50,000 a month before the credit crunch.
Mr Shapps admitted the government cannot ‘dictate’ house prices, but said a national debate is needed about measures to combat demand and keep prices stable.
He said the government would help stabilise the housing market by using economic policy to ‘keep interest rates low’.
Mr Shapps pledged to do more to help first time buyers, encouraging new banks and competition to make mortgage deals more competitive.
And he said the coalition’s ongoing review of bank lending would ensure that mortgage loans are better controlled so that there is no repeat of the orgy of sub prime lending that led to the credit crunch.
In his speech to the Housing Market Intelligence conference in London, Mr Shapps also vowed to look at building regulations make it easier to build new homes.
A Localislm Bill to be published next month will simplify the planning system.
His department has already set up a scheme to pay incentives to local communities to build new homes. A typical council looking to build 300 homes a year would be paid around £2.8 million a year for six years—allowing them to slash council tax or invest in improving the town.
The chronic lack of new homes being built is one of the key reasons for the house price boom.
Last year, just 142,000 new homes were built in the UK, the smallest number during any peacetime period since 1923. In the 1960s, up to 385,000 were built every year.
Stewart Baseley, executive chairman of the Home Builders' Federation, said the industry 'urgently' needs clarity about the coalition Government's new planning system.
He said it was the only option to 'help end the current house building hiatus'."
Source: Your home is a place to live, not a pension: Tory minister vows to end era of house price booms | Mail Online
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Need to find new house for rent and the choice is rather tulipy at the moment
Ministers will fight to prevent dramatic house price rises – warning middle class families that they should not rely on their homes to fund their retirement.
Housing Minister Grant Shapps said the government would seek to ensure property prices rise more slowly than incomes to prevent a repeat of the housing boom that has made it impossible for a generation to get on the housing ladder.
Mr Shapps issued a stark warning to the middle classes that they will no longer be able to use rising property prices as a retirement nest egg.
Calling for an end to the ‘lottery’ of the housing market, Mr Shapps said: ‘People should think of homes as a place to live rather than a pension.
‘What is required now is a period of house price stability. House price booms keep people out of the market. And house price busts mean people’s homes are worth less than they paid for them.’
House prices fell 3.6 per cent in September, the biggest monthly fall since records begain in 1983, wiping £6,000 off the value of the average home in just one month.
But average prices, currently just over £162,000, nearly double the £85,000 average a decade ago.
Mr Shapps stressed that he does not want to see ‘a dramatic fall in house prices’.
But he said: ‘I think we need a market that’s boring, where the pressure of making what could be the single biggest financial decision of your life, is based on your needs and desires, not on whether you feel lucky. Buying a home shouldn’t be like playing the lottery.’
Mr Shapps message is unlikely to appeal to many grassroots Tories who have relied on regularly rising house prices to fund their retirements.
But the housing minister warned that rising prices have created a ‘Sorry’ generation, a reference to the 1980s sitcom in which Ronnie Corbett played a middle aged man who lives with his mother.
‘With a house now liable to cost perhaps seven times someone's earnings, it is no surprise that the average unsupported first-time buyer is now 37 years old,’ he said.
‘Sorry was once a joke, now it’s real life. We’d like to make it a joke again.’
Defending his stance, he said: ‘The exact same people in Middle England who want a retirement nest egg will say that their child can’t leave home because they can’t afford it.
‘Over time we want to move to a position where house prices continue to grow but peoples’ ability and purchasing power increases quicker.’
A recent survey, from the National Housing Federation, found around 30 per cent of middle-class parents would actually like house prices to drop to help their children.
In August, just 18,300 loans were handed out to first-time buyers, compared to 19,300 in July, and up to 50,000 a month before the credit crunch.
Mr Shapps admitted the government cannot ‘dictate’ house prices, but said a national debate is needed about measures to combat demand and keep prices stable.
He said the government would help stabilise the housing market by using economic policy to ‘keep interest rates low’.
Mr Shapps pledged to do more to help first time buyers, encouraging new banks and competition to make mortgage deals more competitive.
And he said the coalition’s ongoing review of bank lending would ensure that mortgage loans are better controlled so that there is no repeat of the orgy of sub prime lending that led to the credit crunch.
In his speech to the Housing Market Intelligence conference in London, Mr Shapps also vowed to look at building regulations make it easier to build new homes.
A Localislm Bill to be published next month will simplify the planning system.
His department has already set up a scheme to pay incentives to local communities to build new homes. A typical council looking to build 300 homes a year would be paid around £2.8 million a year for six years—allowing them to slash council tax or invest in improving the town.
The chronic lack of new homes being built is one of the key reasons for the house price boom.
Last year, just 142,000 new homes were built in the UK, the smallest number during any peacetime period since 1923. In the 1960s, up to 385,000 were built every year.
Stewart Baseley, executive chairman of the Home Builders' Federation, said the industry 'urgently' needs clarity about the coalition Government's new planning system.
He said it was the only option to 'help end the current house building hiatus'."
Source: Your home is a place to live, not a pension: Tory minister vows to end era of house price booms | Mail Online
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Need to find new house for rent and the choice is rather tulipy at the moment
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