Housing Minister exposed on 10% fall in property prices
by Gill Montia
Housing minister, Caroline Flint, has unwittingly publicised the Government’s fears for the UK housing market by allowing onlookers sight of a confidential cabinet document.
The paper was being carried by Ms Flint in such a way that it could be photographed and the text revealed.
The document suggests that the Government is expecting house prices to fall but that it is finding it difficult to estimate the scale of the drop.
However, a year-on-year decline of five to ten per cent, at best, could be seen later in 2008. (A 10% drop would reduce the value of the average UK home by around £20,000.)
The paper also highlights the difficulties facing the housebuilding sector, with new starts already down 10% compared to this time last year and housebuilders predicting further falls.
The rise in repossessions gets a mention as does the need to develop effective measures against the risk of the situation deteriorating, while at the same time convincing the population that it has the Government’s support.
The document was positive about the fundamentals of the UK economy and the continued high demand for housing.
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