13
Oct
Brown's housing market confidence
The UK property market is likely to bounce back before those of
other countries because 'we failed' to build enough houses, Gordon
Brown has said. The prime minister told a City audience the US and
Spain had 'overbuilt' homes during the years of rising prices. In
contrast the UK had a 'pent-up demand', as not enough had been
built. He said the UK problem was not shortage of demand for homes
at 'the right prices' but a shortage of mortgages 'at the right
prices for people to buy'. Mr Brown was speaking during a question
and answer session at Reuters in London after a speech focusing on
the 37bn pounds bank rescue plans unveiled earlier on Monday. SPAIN
& US The package - which also includes guarantees of inter-bank
lending - is designed to restore financial stability and to
encourage the resumption of more lending to business and to people
who want mortgages. Property prices have fallen from record highs
over the past 12 months in the UK and in many other countries. Mr
Brown's government had been seeking to increase the numbers of
homes being built in recent years, but the prime minister admitted
that 'we failed over many years to build enough houses to meet the
need that was there'. He said 200,000 homes a year had been built
in the UK when there was a demand for 300,000. That was in contrast
with the US and Spain during the boom years where, he said, 'they
over-built... prices will come down because of that and the market
will start up again at a new level'. 'I think the housing market in
Britain therefore has a better chance of starting more quickly
again than the housing market in the States (US) or Spain - but
that's a relative judgement,' Mr Brown added. The government wants
RBS and Lloyds TSB to boost loans to house buyers and small
businesses as a condition of its injection of 37bn pounds. But the
Council of Mortgage Lenders said the government's plan for major
banks to return lending to 2007 levels was 'not prudent or
desirable'. The plan would not fit with the picture of falling
house prices and low demand, it added. ARTICLE FROM BBC NEWS
WEBSITE 13TH OCTOBER 2008