Government targets will not solve affordability problems - report

26-Oct-2007

A government advisory body has suggested that its house building targets will not be sufficient to stop house prices from rising further out of the reach of the average first time buyer in future.

The National Housing and Planning Advice Unit (NHPAU) has said that the average price of a home is now equivalent to seven times the average salary, adding that this could rise to nine-and-a-half times that amount by 2026 even if the planned number of homes are built.

Earlier this year Gordon Brown unveiled plans to build three million new homes by 2020, by NHPAU has said that a further 270,000 a year will be needed if buyers are to be able to afford a first time buyer mortgage.

Such targets are not unfeasible, one of the co-authors of the NHPAU report has told the BBC.

"We built more than that number back in the 1930s in Britain when we had a considerably smaller population," said professor Stephen Nickell.

"And most other countries in the developed world, proportionately speaking, build houses at a faster rate than we do," Mr Nickell added.

The suggestions are the latest in a series of potential stumbling blocks that are threatening to thwart the government's plans, with separate advisory groups and other bodies having recently suggesting both that the green belt could be threatened by the proposals and that they could bankrupt the social housing sector.

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