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Speculation has been mounting that further interest rate cuts will be announced by the Bank of England, after minutes from its previous meeting on cuts were released. They reveal that the Bank's n...
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Monday 11th June 2007
Affordability in Britain's residential property market has reached a "critical" point, housing minister Yvette Cooper has admitted.
Ms Cooper's comments came in response to concerns raised by the government's newly-established National Housing and Planning Advice Unit (NHPAU) that the price of housing is likely to increase to ten times the average salary by 2026.
She told the Today programme that the government has to build 190,000 new homes a year to avoid a serious supply shortage preventing first-time buyers from getting onto the bottom rung of the property ladder.
"What they are saying is that if we simply carry on building houses at the rate we have been, this is what will happen in terms of first-time buyers of the future," she said.
Ms Cooper added it was vital to keep up with housing demand to stop first-time buyers being priced out of the market.
"It is not fair on them. That is why we need to build far more homes and why people who still oppose new developments across the country do need to recognise the implications for the next generations. It is simply not fair on them if we don’t deliver the additional homes we need."
The NHPAU says average house prices were already worth seven times average annual earnings in 2006.
Around 190,000 new properties are set to be built each year under regional plans, but household numbers are expected to annually increase by 223,000 until 2030.
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