Prudent buyers beware

Published 12th Jul 2007

Gordon Brown has a dream, and it’s starting to sound like the same one as buyers across Britain. He will, he promised yesterday, put “affordable housing within the reach of not just the few but the many”. But our prudent former Chancellor will have made sure that his proposals will not flood the market with new properties and cause the price of existing homes to drop.

Releasing enough government land for 160,000 more homes will go a long way towards alleviating the worst of the undersupply. But, as the Brown proposals are focused on these being achieved through housing association and other social schemes, they will be unlikely to reach high enough up the housing ladder to help those who earn good wages or already own a property.

That even relatively affluent buyers cannot afford suitable properties where they need them is keeping parents awake and damaging a belief in rising house prices. But those same parents, likely beneficiaries of the 13-year property boom, will be secretly reassured that the new homes are unlikely to dent prices.

But buy-to-let investors who have been snapping up modern flats over the past decade might want to consider if their properties are desirable enough to withstand future price pressure.

Brown’s towns might help today’s teenagers to get on the ladder eventually. But buyers in the market now should start the search for alternatives.

Source: ' Times Online '

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