News: Housing boom is 'causing misery'

Thu, 13 Sep 07

The recent house price boom represents a "failure" of policy has brought "misery" to thousands of people, a leading economist has stated...

Roger Bootle, managing director of Capital Economics, argued: ‘A lack of new housing being built is the critical problem. Ministers have failed to secure more land for housing development”.

But a leading civil servant said the government was "taking action" to provide more land for building.

Annual house price inflation in England and Wales has slowed in recent months, the Land Registry confirmed earlier this month, following a series of interest rate rises in 2007. But house prices in London are still rising 15% year on year.

Unbridled failure

Mr Bootle commented: ‘the extraordinary rate of house price growth seen in recent years had had damaging effects for the economy and household finances. Most people see the UK housing market as a story of great success. I don't. On the contrary, I see it as one of the UK's most unbridled failures."

Mr Bootle continued: “The root of the problem is the lack of land being made available for new building. I wish the government would forget all the gimmicks - affordable housing, key workers and the like.

“The central issue is quite clear - it is getting to grips with the availability of land for building and ensuring that the rate of building moves up quite sharply after that."

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