Tory row as Boris takes on Osborne’s housing boom

Tim Wallace
Follow Tim
BORIS Johnson yesterday said only building more houses would help Londoners get on the property ladder – just as chancellor George Osborne denied there is a housing bubble in the capital, and argued subsidising mortgages will help buyers the most.

In the week it was revealed house prices rose at almost 10 per cent in the last year, the London mayor set out a target to build 40,000 houses a year for the next decade to ease the pressure on buyers.

“The best way to deal with the undoubted problem of affordability is to build more homes,” Johnson said.

“That is the solution, and that is what we are doing. What we’ll do now is looking at bringing in investors – you are seeing investors from around the world that want to build houses in London.”

It came as Osborne was defending his Help to Buy policy, which will see buyers with deposits of as little as five per cent get government guarantees of up to another 15 per cent of their house price.

“I would say yes, lets be alert to the risks, but lets not pretend there is a housing boom,” the chancellor told the Institute of Directors’ annual convention. “Lets go on trying to fix specific problems in our financial system, like the lack of availability of high loan to value mortgages, which are not weapons of financial destruction but actually tools that help many families get on the housing ladder.”

Osborne argued he had made changes to the planning system which should help more houses be built, but that the more immediate focus should be on making it easier to buy a property now. And if a boom does look likely, he said the Bank of England will be on hand to help.

Meanwhile the mayor said the UK needs to challenge EU attacks on the City, arguing the financial district brings great benefits to the EU as a whole by competing effectively with the rest of the world. And he called for cities across England to be given more control over their budgets to boost local democracy.