Housing minister, Grant Shapps, at yesterdays Housing Market Intelligence conference in London called for house price stability to prevent generations being priced out of home ownership.
Minister Shapps asserted that buying a property should not be seen as an investment so much as a home which resounded the late 80’s early 90’s saying that “homes are for nesting not for investing”. He said: “This country is in danger of letting down the aspirations of a generation if homes do not become more affordable in the long term. A home should first and foremost be thought of as a place to live and bring up a family.”
The minister promised Government support for house builders by cutting through the ‘alphabet soup’ of red tape. He said the Government would simplify the system, with house builders’ help. Although welcomed rhetoric no detail was provided.
In 2009, house building hit its lowest level for any peace time years since 1924 as developers have struggled with adapting to living in a low volume sales market place and obtaining development land at prices that make building viable.
As for Shapps wish for a price stable market, affordable housing market whilst this might be desired, history shows only a rising or falling market getting the balance right by controlling the influencing conditions such as mortgage funding are going to be truly key to the Coalition Governments aim. Certainly the current stifling of mortgages with many would be movers simply not achieving lender lending criteria suggests house prices will head south until such time as home buying consumers ability, affordability and desire meet the level of willing and able sellers.
On a positive note it should be remembered that for the majority of home owners they complete their move simultaneously with a purchase therefore the difference in price between the two homes remains more or less the same, affecting only the level of equity held. For those now in or will undoubtedly fall in to negative equity, it’s a case of waiting for a rise in house prices, be lucky enough to gain a capital windfall (e.g. inherit or win the national lottery!) or see if the mortgagee has and negative equity mortgage transfer schemes.