9:23 AM, 5th January 2011, About 13 years ago
Grant Shapps recently revealed the government is looking at ways to take the heat out of the property market by stabilising the boom-or-bust trends that have crippled the sector since the 1970s.
Speaking on BBC Radio’s Today program, he said ministers wanted to see the removal of the ‘imbalance’ between wages and house prices and a market where property was more affordable for everyone.
To quote Shapps directly: “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 also said, “It would perhaps be desirable if house prices didn’t do too much at all in the long term. Over a longer period of time, that would allow average earnings to catch up and allow housing to become a more affordable commodity.”
That’s not going to please people who already own property but might appeal to a few new voters who want prices to reduce so they can get on the property ladder. Perhaps Shapps realised this.
Just a few days later, in a Radio 4 interview Shapps said “Talk of ending house price boom and bust is foolish”. The Telegraph produced this article based on the Radio 4 interview.
Despite the housing minister’s well-intentioned remarks, all the leading banks and building societies have suggested mortgage lending will stay at the same levels as 2010.
Economists and housing commentators consider house prices may fluctuate slightly throughout the next 12 months, but will also probably end the year at roughly the same as they are now as low supply and high demand will shore up the market.
Shapps also seems to be trying to win the vote of savers with talk of a neutral base rate of 5%. How will first time buyers and all those voters with existing mortgages feel about a 1000% rise in the base rate though.
You’re not going to please all the people all the time Mr Shapps. Please be honest with us seems to be the message from many people.