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Private Rented Sector (Young Homebuyers)

Volume 542: debated on Monday 12 March 2012

8. What assessment he has made of the effect of the number of properties in the private rented sector on young people attempting to purchase a home. (98961)

In 2011, in terms of value, buy-to-let mortgages accounted for just 8% of total loans for home purchases. The biggest barrier to home ownership for many young people is not that, but the need to raise a deposit. That is why I know that the hon. Gentleman will welcome the NewBuy scheme, which we launched this morning.

Obviously, I am aware that over the weekend the Government announced the home buy scheme for new build, which is a shadow of the sub-prime lending that went on previously, so I advise caution. The private rented sector, however, has added about 6% to the value of properties. Does the Minister agree that the issue is rising house prices and the cost of housing, not the availability of mortgages?

Just to clarify one point, sub-prime lending happened when people who could not afford to pay a mortgage back were lent money, sometimes as much as 120% of the value of the property. That is nothing to do with today’s NewBuy scheme. I know that the hon. Gentleman takes a keen interest in the private rented sector in particular. He makes a lot of very good and serious points about it and I can inform him that this Friday I intend to come and see him in his constituency to see the problems for myself.

I wonder what will shake the Housing Minister out of his complacency. Surveys show that 90% of private sector tenants would prefer to be living under another form of tenure, but his policies are trapping more and more people in private rented accommodation, paying ever-increasing rents. Despite his rhetoric, the Housing Minister is failing those tenants and failing to achieve his claims that this Government would build more homes than Labour achieved. When will he get a grip on this housing crisis and stop making empty announcements that fail to live up to expectations?

I have certainly been shaken out of any sense of complacency by that question, given that it came from a member of a party under whose government we saw house building crash to its lowest level since the 1920s. I can report to the House this afternoon that in the past year alone house building starts in England went up by 25% compared with those in 2009.