Gordon and House Prices

“I will not allow house prices to get out of control and put at risk the sustainability of the recovery.”
Gordon Brown, 1997 Budget Statement.

But Gordon did allow house prices to get out of control. Some of the housing market numbers are scary, the average house now costs 6 times average earnings – in London the figure is 10 times earnings. The historical long term figure is some 3 and half times earnings.

Is it any wonder that the average age of a first time buyer is 33 years old? Twentysomething families can’t afford a home of their own.

Yield models suggest* that house prices have to fall 40% to return to the long term average.

The simple truth is that in real terms it is now twice as expensive to buy a house as it was before Gordon promised he would “not allow house prices to get out of control”.

*Or rents could rise a corresponding amount.




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Jacob Rees-Mogg on Number 10’s customs partnership:

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