Housing minister wants price stability

HOUSING minister Grant Shapps said yesterday that unaffordable house prices were “crazy”, and he wanted to stabilise the market to bring home-ownership within the reach of more younger people.

“It’s crazy that we think in this country it’s normal to have a situation where the most important thing – a roof over somebody’s head – is so unaffordable to such a large number of our fellow citizens,” he said in a radio interview.

Shapps said policies such as regulation of the mortgage market and increasing the supply of new houses could have an impact on the market.

“Over the long term, it would perhaps be desirable if house prices didn’t do very much at all,” he said. “Over a longer period of time that would allow average earnings to catch up and allow housing to become a more affordable commodity.”

Shapps also said in a press interview over the weekend that an example of a “rational” market would be one in which house prices rose by two per cent a year, while earnings rose by four per cent.

Property prices have weakened since late summer after a rebound in late 2009, and the Royal Institution of Chartered Surveyors said in its housing forecast last month that it expected prices to remain broadly flat in 2011.