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4 July 2008

Flint: Property boom unsustainable

Housing Minister Caroline Flint concedes the booming housing market that Britain has enjoyed for mor

By Chris Ames

Opposition politicians have accused housing minister Caroline Flint of a major gaffe after she admitted that the housing market has suffered an “unsustainable property boom”. The admission undermines Gordon Brown’s promise that Britain would not return to “boom and bust”.

Shadow Housing Minister Grant Shapps said: “We applaud Caroline Flint’s honesty and welcome the fact she has come clean and admitted Labour are responsible for the instability in the housing market. We are glad the Government has admitted that they have failed first time buyers and families. Labour’s big failing is that they failed to put anything away to fix the roof when the sun was shining and the public are now paying the price.”

Liberal Democrat Lembit Opik said: “It’s good that Caroline Flint realises the boom couldn’t last for ever. But after the boom comes the bust.”

Setting out proposals to deliver affordable housing and preserve capacity in the building industry, Flint said that without them there was a real risk of “another unsustainable property boom, making homes even more unaffordable for first time buyers and growing families”. 

A spokesman for the department for Communities and Local Government did not deny that Flint’s comments related to the recent state of the housing market, although he said they referred to the need to address “longer term affordability”. The comments appear to signal a significant change in emphasis for the government, which had previously insisted that the fundamentals of the market were sound.

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In May, Flint inadvertently revealed her briefing papers for a Cabinet meeting to a photographer. Her notes included a comment on the housing market: “We can’t tell how bad it will get.” In an interview for the Times last week, Flint sought to distance the government from the slump. But she had to correct herself after describing the current situation as “terrible”.

Both the Tories and the Liberal Democrats criticized Flint’s proposals. Shapps called for the government to “take our lead and axe stamp duty for first time buyers on properties up to £250,000 and ditch HIPs (Home Information Packs ).”

Opik said: “We haven’t seen much action to help families who stand to lose their homes.  We’ve made suggestions ranging from affordable rented housing through to shared ownership schemes to prevent homelessness. I hope the Minister will take these proposals seriously.  The alternative is repossessions, homeless families and all the misery which goes with it.” 

A spokesman for Communities and Local Government said: “The Minister was making a general point about property booms – for example like the one we saw in the late 80s.The credit crunch is affecting house prices not just in the UK but in other parts of Europe and the USA after sustained rises in recent years. It is important to recognise that demand for homes is going to increase, not decrease, and if house builders are not ready for when the market picks up we could see homes becoming even more unaffordable for first time buyers. “

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