Housing: Market Stability

Lord Best Excerpts

Monday 23rd May 2011 Lords Chamber

Asked By

[Lord Best]

To ask Her Majesty’s Government what action they will take following the Joseph Rowntree Foundation’s investigation into the creation of a sustainable housing market.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, the Government welcome the Joseph Rowntree Foundation’s investigation and report, which was published last Tuesday. We share its desire to see a fairer, more stable housing market that does not shut out first-time buyers and where house prices rise more smoothly in line with earnings. The report concludes that there are no easy answers to address the underlying causes of market instability. However, we are working across government to assess the options that are available and will publish a housing supply strategy in the autumn.

[Lord Best]

I thank the Minister for that very positive and helpful reply. I am sure that this report will be helpful to Ministers, and indeed to everyone who wants to see a stable housing market, not boom and bust. Does the Minister agree that the level of mortgage repossessions, which are now running at 100 a day, might get a lot worse if interest rates and unemployment rise? If so, does she agree that the proposals in this new report for a mortgage protection payment insurance scheme to provide a safety net for homebuyers would be good not only in preventing their homelessness but in stabilising the housing market at a difficult time?

[Baroness Hanham]

My Lords, we welcome any proposals that will enable us to work with the industry to try to find a way around the barriers faced by the insurance scheme at the moment. We currently welcome private insurance solutions and recognise that there are enormous challenges for first-time buyers. We are already running the mortgage rescue scheme, as I am sure the noble Lord knows. Some £200 million has been put into that scheme already, and we have already helped 38,000 households with that money as well as with advice and support. So it is not as though the Government are not doing anything—we are making substantial efforts—and if the economy were to stabilise and settle down, much of this problem would go away.