Ilkley MP Kris Hopkins has clashed with a fellow minister after welcoming the latest hike in house prices.
The Housing Minister raised eyebrows after suggesting rising property prices were a “good thing”, telling an interviewer: “I bought a house and I expect the value to rise.”
The comment followed new figures revealing that prices across the UK had surged by 9.2 per cent over the past year, pushing the average cost to £178,124. But Vince Cable, the Liberal Democrat Business Secretary, warned that home ownership was now “unaffordable” to people on middle incomes.
And he said: “I do not agree with Kris Hopkins. If you are an owner-occupier who has paid off your mortgage, it is an increase in your paper or real wealth. But if you are a young family trying to get into the housing market and it is unaffordable, it is an extremely bad thing.”
Mr Cable also called for a big increase in housebuilding, saying: “That, and only that, is the solution to our housing problem.”
In contrast, Mr Hopkins – promoted by David Cameron last year – has insisted the Coalition is already on course to build more homes than Labour did. And he has dismissed warnings that the ‘Help to Buy’ scheme will inflate a dangerous housing bubble, another favourite criticism of Mr Cable.
Mr Hopkins spoke out after Nationwide, the country’s biggest building society, said prices were sharply on the rise across the country. But the annual increase in Yorkshire – 6.3 per cent, to an average price of £139,775 – was lower than in any other English region.
And, across the North, prices are still below their peak in 2007, before the financial crash.
Interviewed by Newsnight, Mr Hopkins said: “You have got to say that, where we were in 2008 and 2010, we’re nowhere near those prices at this moment in time. There are a lot of people out there who haven’t reached the value of their house that they purchased. I bought a house and I expect the value to rise.”
Bur Mr Cable said: “A family on an average income is nowhere near able to afford a house at the average price.” In the mid-1990s, the average house price was three times average earnings, Mr Cable added – but that ratio now stood at about 5.5.