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Housing spend too low, admits Kelly

Since 1960 the UK has invested a lower proportion of its national income in housing than any other EU country, the Treasury admitted last week.

Speaking at the Council Of Mortgage Lenders&#39 annual lunch on Friday, Ruth Kelly, financial secretary to the Treasury, also said that house building in the UK is now down to levels last seen in the 1920s. She added that if the low supply continues a property built today would have to last 1,000 years before being replaced.

She told delegates: “Partly because of this long-term undersupply, the UK has one of the strongest trends in real house prices in Europe. Homeownership is both the tenure of choice and a source of financial saving. This has profound economic implications, nationally and regionally. ” Again, Professor David Miles&#39 report seemed to be sidelined in favour of Kate Barker&#39s report on housing supply, Kelly saying the former will be consulted on in due course.

Portman development director Matthew Wyles says: “There was little or nothing new in the speech, although I thought there was a sliver of malice in her implied proposal to tax planning gains when she talked about funding proposed measures from the uplift in land values during the development process.”

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