The Catholic Parish of
Saint John Henry Newman

 Covering most of East Leeds

The sharp rise in house prices.

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This article was originally published in the Parish Magazine, and is reprinted here by kind permission of Bill Hopkins

A report in the local paper tells us that house prices have risen by 306% in the past 20 years.

Prices have risen by almost 30% in the year 2002. Some building society spokespersons predict a 'modest' rise of 10% in 2003. Eddie George, the governor of the Bank of England, predicts that prices will moderate sharply. The question that has to be asked is this astronomical rise in house prices a good or bad thing? There are of course winners and losers.The winners are the Estate agents who take a 10% cut of the enhanced prices and the building societies and banks who benefit by the higher loans that they make to home buyers. The individual house owners who see their homes rising in value. This benefit is of course offset when they have to move house, they will have to pay the current market value for their new home.

Who are the losers? The first time buyers, our young people who are attempting to set up home for the first time. We are told that the average deposit required is now £18,000.00.

In reply to a letter to the Prime Minister on the subject, the following is the reply.

"There is no easy answer to rising house prices which affect some parts of the country more than others. In some areas demand is high while supply remains constrained, which pushes up prices. This means that some people cannot afford to buy or rent on the open market.

Nevertheless let me assure you that the government recognises that the supply of good quality affordable housing is important to help sustain the local economy and community by allowing more people to live near their places of work. This is why we have announced a massive new house-building programme worth more than £1.2 billion, up to £365 million on the current year. The extra funds have been allocated to the Housing Corporation's approved development programme (ADP) and should deliver up to 21,000 affordable houses in 2003-04 exceeding the social housing target for 2001-04.This includes housing for both rent at sub market rates and sales through low cost home ownership schemes."

One can only hope that the governments aspirations are realised and that our young people will benefit.

The high cost of housing is certainly a threat to the national economy. Obviously the pressure is on for higher incomes to enable the individual buyers to purchase homes.

In consequence many employers look over-seas to have their products and services to be produced at a lower cost with many disadvantages to the national economy.

Bill Hopkins.

Published Sat 11th Oct 2003 13:37:32

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